Case Law Details
Bombardier Transportation GmbH Vs DCIT (ITAT Delhi)
ITAT Delhi held that the receipts from offshore supply of rolling stock (train sets) cannot be taxable in India as the transfer of title over the goods has taken place outside India.
Facts- The core issue arising for consideration in the present appeal is whether the project office of the assessee and Bombardier Transportation India Ltd. (BTIL) would constitute fixed place Permanent Establishment (PE) of the assessee in India under Article 5 of India – Germany Double Taxation Avoidance Agreement (DTAA).
Conclusion- Held that the receipts from offshore supply of rolling stock cannot be taxable in India as the transfer of title over the goods has taken place outside India.
Held that none of the conditions of fixed place PE as enshrined under Article 5(1) of India – Germany tax treaty stand satisfied to construe BTIL as the PE of the assessee in India. Thus, in view of our aforesaid conclusion, we hold that the attribution of profit qua the receipts from offshore supplies to the alleged fixed place PE in the form of BTIL is unsustainable as, in our view, BTIL cannot be construed as PE of the assessee in India.
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