Case Law Details
Air Liquide Global EC Germany GMBH Vs ACIT (ITAT Delhi)
In a landmark decision, the Income Tax Appellate Tribunal (ITAT) Delhi bench adjudicated the appeal filed by Air Liquide Global EC Germany GMBH against the Assistant Commissioner of Income Tax (ACIT) concerning the taxability of amounts received from offshore supplies. The case, pertaining to the assessment year 2020-21, highlights critical aspects of international taxation, Permanent Establishment (PE), and the applicability of specific sections of the Income-tax Act, 1961, in the context of cross-border transactions.
Background and Core Dispute
Air Liquide Global EC Germany GMBH, a non-resident entity incorporated in Germany, engaged in supplying plants and equipment to Bharat Petroleum Corporation Limited (BPCL) in India. The crux of the dispute revolved around the taxability of ₹89,73,88,390 received from these supplies. The assessee argued that these transactions, executed on a Freight On Board (FOB) basis outside India, did not constitute a taxable event within the Indian jurisdiction. Contrarily, the tax authorities contended that the transactions were part of a composite contract, encompassing services that culminated in a taxable presence in India, warranting taxation under Section 44BB of the Income-tax Act, 1961.
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