Shenhzhen SDG Information Co. Ltd. Vs CIT (ITAT Delhi)
ITAT Delhi held that offshore supply of equipment revenue couldn’t be taxed in India. Thus, once it is not assessable even under the normal provisions, section 44BBB would also not apply. Accordingly, appeal allowed.
Facts- Vide the present appeal, the appellant has mainly contested wrong invocation of provisions of section 263 of the Income Tax Act. Further, appellant has also contested wrong invocation of provisions of section 44BBB of the Income Tax Act whilst determining taxable income the appellant to be Rs. 6,43,77,612/- i.e. 10% of gross receipts of Rs. 64,37,76,118/-.
Conclusion- Held that the learned CIT(IT) has erred in law and on facts in treating the assessee’s offshore supplies revenue as taxable in India after having unilaterally re-drawn the above agreement clauses forming subject matter of our adjudication; are hereby reversed in very terms. That being the case, it is concluded in assessee’s favour and against the department that once it is not assessable even under the normal provisions, section 44BBB would also not apply in it’s case. Ordered accordingly. Thus, the present appeal is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This assessee’s appeal for assessment year 2017-18, arises against the CIT(IT), Delhi-3’s DIN and order no. ITBA/COM/F/17/2021-22/1041465293(1), dated 24.03.2022 involving proceedings under section 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
