AB Sciex Pte Ltd, Singapore V. ACIT, Circle Int Taxation 1(1)(1), Delhi

ITA 1968/DEL/2022

AI Insights

The case involves AB Sciex Pte Ltd., a non-resident corporate entity from Singapore, appealing against the final assessment orders for the assessment years 2018-19 and 2019-20. The primary issues in the appeals were the existence of a Permanent Establishment (PE) in India and the attribution of profit to such a PE, if it existed. The Assessing Officer had previously determined that the assessee had a fixed place PE and a dependent agent PE in India for the assessment year 2017-18, which was upheld by the Dispute Resolution Panel (DRP). However, the Tribunal had later found that the assessee did not have a PE in India. The Tribunal's decision in the 2017-18 assessment year was cited by both parties as being applicable to the current appeals.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 634286 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-03-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 23-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND KUMAR KEDIA
• Assessee Lawyers: AJAY VOHRA
• Keywords: Permanent establishment
• Section: 143(3)

Judgement Text

I.T.A.Nos.1968 & 1969/Del/2022 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D” NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER आ .अ.स ं /.I.T.A Nos.1968 & 1969/Del/2022 /Assessment Years: 2018-19 & 2019-20 AB Sciex Pte Ltd. Block 33, 46, Marsiling Industrial Estate 30406, Singapore 739256, Singapore. ब म Vs. ACIT Circle Int. Taxation 1(1)(1) Delhi. PAN No. AANCA1192P अ Appellant /Respondent िनधा रतीक ओरसे /Assessee by Shri Ajay Vohra, Sr. Adv. & Ms. Suchita kanodia, Adv. राज वक ओरसे /Revenue by Shri Anand Kumar Kedia, CIT DR स ु नवाईक तारीख/ Date of hearing: 19.10.2022 उ ोषणाक तारीख/Pronouncement on 26.12.2022 आदेश /O R D E R PER SAKTIJIT DEY, J.M. Captioned appeals by the assessee are against the final assessment orders passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 pertaining to assessment years 2018-19 and 2019-20, in pursuance to the directions of learned Dispute Resolution Panel (DRP). I.T.A.Nos.1968 & 1969/Del/2022 2 2. At the outset, learned Senior Counsel appearing for the assessee, on instructions, did not Press ground no. 1 in both the appeals. Accordingly, these grounds are dismissed. The issues raised in other grounds are basically concerning the existence or otherwise of a Permanent Establishment (PE) in India and, in case, there is a PE, attribution of profit to the PE. 3. Briefly the facts, more or less common, in both the assessment years are that assessee is a non-resident corporate entity incorporated in Singapore and a tax resident of Singapore. As observed by the Assessing Officer, the assessee is engaged in the business of manufacture and sale of scientific research instruments and peripherals. Additionally, it provides repair and maintenance services to its customers in respect of products sold. In the assessment years under dispute, the assessee had earned revenue from sale of products as well as rendering of services to the customers in India. In the return of income filed for the impugned assessment years, the assessee offered nil income and claimed refund of tax deducted at source. In course of assessment proceedings, the Assessing Officer, on perusal of record, noticed that while completing assessment in assessment year 2017-18, the Assessing Officer had held that the assessee had a fixed place PE I.T.A.Nos.1968 & 1969/Del/2022 3 and dependent agent PE in India in the form of DHR Holding Pvt. Ltd. He further observed that the aforesaid decision of the Assessing Officer was upheld by learned Dispute Resolution Panel (DRP). Extensively referring to the decision taken in assessment year 2017-18, the Assessing Officer observed, since facts are identical, therefore, the revenue earned by the assessee from sale of equipment and provision of repair and maintenance services having been connected to the PE in India, is taxable in India. Accordingly, he attributed profit to the PE by following the methodology adopted in assessment year 2017-18. Against the draft assessment orders so framed, the assessee raised objections before learned DRP. In course of proceedings before learned DRP, the assessee specifically submitted that while deciding assessee’s appeal in assessment year 2017-18, the Tribunal has held that the assessee had no PE in India. Though, learned DRP took note of the decision of the Tribunal in assessment year 2017-18, however, it still held that the decision of the DRP in assessment year 2017-18 will apply. Accordingly, it rejected the objections of the assessee. 4. Before us, it is a common point between learned Counsel appearing for the assessee as well as learned Departmental I.T.A.Nos.1968 & 1969/Del/2022 4 Representative that the issues arising in these appeals are squarely covered by the decision of the Tribunal in assessment year 2017-18. 5. Having perused the facts and materials on record, we find identical issues relating to existence of fixed place PE/dependent agent PE and attribution of the profit to PE came up for consideration before the Tribunal in assessee’s own case in assessment year 2017-18. While deciding the issues in order dated 29.04.2022 rendered in ITA No. 514/Del/2021, firstly, the coordinate bench held that DHR Holding India Pvt. Ltd. neither constitutes a fixed place PE nor dependent agent PE either under the domestic law or under treaty provisions. In other words, the Tribunal clearly and categorically held that the assessee had no PE in India. Alternatively, the Tribunal in principle accepted assessee’s contention that where the transaction between the assessee and the alleged PE is remunerated at arm’s length, no further profit can be attributed to the PE. Thus, in sum and substance, the Tribunal decided the issues in favour of the assessee. From the respective orders of the Revenue authorities it is very much clear that there is no difference in factual position in so far as assessment year 2017-18 and the impugned assessment years are concerned. However, just to keep the issues alive learned I.T.A.Nos.1968 & 1969/Del/2022 5 DRP has chosen to follow their decision in assessment year 2017-18 and not to apply the decision of the Tribunal for the same assessment year. We cannot accept the aforesaid reasoning of the DRP. Since, the issues arising for consideration are squarely covered by the decision of the Tribunal in assessee’s own case in assessment year 2017-18, respectfully following the same, we hold that the assessee had no PE in India. Hence, no part of its business profit is taxable in India. Accordingly, we direct the Assessing Officer to delete the additions. 6. In the result, the appeals are allowed, as indicated above. Order pronounced in the open court on 26/12/2022 Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) PRESIDENT JUDICIAL MEMBER Dated: 26.12.2022 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi