NCR GLOBAL SOLUTIONS LIMITED,IRELAND V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2(2)(2), INTERNATIONAL TAX, NEW DELHI

ITA 1885/DEL/2025

AI Insights

The case involves NCR Global Solutions Limited, an Irish company, appealing against the final assessment order passed by the Deputy Commissioner of Income-tax, which added Rs. 33,33,24,968 to the assessee's income for the Assessment Year 2022-23. The addition was based on the premise that the assessee had a Permanent Establishment in India through its distributor, CIPL, which engaged in sales and distribution of NCR's products. The Tribunal examined whether CIPL constituted a PE and whether the income attributed to it was taxable in India. The Tribunal's decision was influenced by previous rulings in similar cases, which had consistently found in favor of the assessee, establishing that CIPL did not constitute a PE.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786174 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2022-2023
• Appeal Filed On: 26-03-2025
• Other Referred Cases: Engineering Analysis Centre of Excellence Private Limited v. The Commissioner of Income Tax & Anr, Formula One World Championship v. The Commissioner of Income Tax & Anr
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M.S. NETHRAPAL
• Assessee Lawyers: NAGESWAR RAO; PARTH
• Keywords: Business income; Opportunity of being heard; Transfer pricing; International transaction; Onus to prove; TDS; Initiation of penalty proceedings; Double taxation relief; Permanent establishment
• Section: 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, D: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.-1885/Del/2025 [Assessment Year: 2022-23] NCR Global Solutions Limited, Lakeview Drive, Airside Business Park, Swords, Co. Dublin, K67 N2N9, Ireland. Vs DCIT, Circle- 2(2)(2), International Tax, Civic Centre, Minto Road, Delhi- 110002. PAN- AADCN5762E Assessee Revenue Assessee by Shri Nageswar Rao, Adv. & Shri Parth, Adv. Revenue by Shri M. S. Nethrapal, CIT(DR) Date of Hearing 06.08.2025 Date of Pronouncement 30.10.2025 ORDER PER BRAJESH KUMAR SINGH, AM This appeal has been preferred by the assessee against the Final Assessment Order dated 02.01.2025 passed by the Learned Assessing Officer (AO) under Section 143(3) read with Sections 144C(13) of the Income-tax Act, 1961 (“the Act”), Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 2 pursuant to the directions of the Hon'ble Dispute Resolution Panel (DRP) order dated 10.12.2024 for the Assessment Year 2022-23. 1.1 At the outset, the Ld. AR submitted that the issue in the present appeal is squarely covered in favour of the assessee as per the order of the Co-ordinate Bench of the Tribunal in assessee’s own case and of the Hon’ble Delhi High Court in assessee’s own case which is discussed later in this order. 2. Brief facts of the case: The assessee M/s NCR Global Solutions Limited (\"GSL\") filed its return of income for AY 2022-23 on 28.11.2022 declaring income at Rs. 26,42.33,590/- which was offered to tax at special rate @ 10%. claiming benefit of provisions of DTAA between India and Ireland. The case was selected for scrutiny under CASS and accordingly, notices u/s 143(2) of the Income Tax Act, 1961 dated 31.05.2023 was issued and duly served upon the assessee electronically. Further, notice u/s 142(1) of the income Tax Act, 1961 dated 21.11.2023 was issued along with a detailed questionnaire through e- proceeding portal and served upon the assessee. In response to the said notices, the assessee furnished its reply time to time through e-proceedings portal of the Income Tax department portal. 3. During the year, the assessee was a tax resident of Ireland and was the principal distributor and licensor for software and hardware products and related support services. The AO noted that during the year the assessee sold NCR software and Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 3 hardware products and related support services through its Affiliates and in India, GSL had appointed M/s NCR Corporation India Pvt Ltd. (CIPL) as its non-exclusive distributor in exchange for payments for NCR's distribution activities. 3.1 During the year under consideration, the assessee company had earned revenue from CIPL in the form of Sale of Software, Export of Goods, Reimbursements and Royalty for use of technology and brand. Out of these transactions the assessee had offered to tax the Royalty for use of technology and brand received as 'Royalty'. The assessee was asked vide notice u/s 142(1) dated 21.11.2023 to furnish the details of Branch Offices/Project offices/Liaison office/Godowns, Warehouses and construction or other business sites in India and detail of agents in India and to give a note on why the above does not constitute a 'business connection' and a 'Permanent Establishment' in India. The assessee submitted that it does not have any branch office / project office / liaison office/godown / warehouse / construction or other business sites or any other form of business presence in India which constitute a Permanent Establishment (in the form of Fixed place PE, Agency PE, Installation PE, Construction PE, Service PE) in India in accordance with Article 5 of the India- Ireland Tax Treaty or a business connection in terms of Section. Further, the assessee has provided the details of revenue received during the FY 2021-22. The details of the revenue are as under: Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 4 Nature of receipt Amount of Receipt Income offered to tax Reasons for not offering income to tax Royalty for use of technology and brand 264,233,593 264,233,593 Not applicable Sale of hardware 643,436,236 - The assessee has claimed that in absence of permanent establishment in India, receipts from sale of hardware is not taxable in India. Sale of hardware 717,073,839 - The assessee has claimed that receipts not in the nature of 'Royalty' 'Fees for Technical Services' pursuant to Article 12 of India-Ireland Tax Treaty. The assessee has further claimed that in absence of a permanent establishment in India, the said receipts are not taxable in India and that this position is also upheld by the Hon'ble Supreme Court vide order dated 2 March 2021, in the case of Engineering Analysis Centre of Excellence Private Limited v. The Commissioner of Income Tax & Anr (CIVIL APPEAL NOS. 8733- 8734 OF 2018)on similar issue of whether payments in respect of embedded software made by distributors qualify as \"royalty\" under the Act, as well as the India-Ireland Tax Treaty. 3.2 The AO after considering the submissions of the assessee noted that the assessee had received income from sale of software of Rs. 71,70,73,839/- and from sale of goods of Rs. 64,34,36,236/-. 3.3 Thereafter, the AO analyzed the term ‘Permanent Establishment’ as per the provisions of Article 5 of India -Ireland Treaty and the relied upon the finding of the decision of the Hon’ble Apex Court in the case of Formula One World Championship (Civil Appeal Nos.- 3849 to 3851 of 2017 and on OECD Commentary on Model Tax Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 5 Convention and held that the assessee GSL through CIPL was procuring orders, executing sells to the Indian purchasers / parties which could not be done without any place of business in India and accordingly held that the assessee has a fixed place PE in India in terms of Article 5(1) of India- Ireland Treaty. 3.4 Further, the AO after discussing about the concept of Dependent Agency Permanent Establishment (DAPE) observed that the present case CIPL works mainly or wholly on behalf of the non-resident assessee, and therefore, the assessee has an agency PE in India in the form of CIPL. 3.5 In view of the above facts, the AO issued show cause notice dated 12.02.2024, to which the assessee submitted its reply dated 19.02.2024 which was not found tenable by the AO. The AO in respect of assessee’s claim that the issue in appeal was covered in favour of the assessee in assessee’s own case as per the details of the order discussed later in this order noted that the Department was in the process of filing appeal to the Hon'ble High Court against the decision of the Hon'ble ITAT for AY 2018-19 & 2019-20. 3.6. In view of the above facts, the AO proposed in the draft assessment order that the assessee had PE in India, which acted as distributor of NCR Software products on behalf of assessee, to achieve the sale/business in India and assessee earned income from distributing license fees i.e. end user license fee for software license Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 6 and software updates from CIPL. Further, the AO noted that the assessee did not provide any accounts for such type of income which was attributable to its permanent establishment in India and under such circumstances, Rule 10 of the Income Tax Act was invoked by the AO for computing the profit of the assessee attributable to its business activities in India and proposed an addition of Rs. 33,33,24,968/- as Business Income of the PE taxable @ 40% plus applicable surcharge and cess in the draft assessment order dated 05.03.2024. For arriving at the said amount the AO estimated 35% of the gross revenue of Rs. 136,05,10,075/- as profit at Rs. 47,61,78,526/- and out of Rs. 47,61,78,526/-, 70% of Business Income amounting to Rs. 33,33,24,968/- was the profit determined by the Ao attributable to the PE in India. 4. Aggrieved with the said order, the assessee filed its objection before the DRP. The DRP noted that it was a legacy issue and the same issue had come up before the panel for A.Ys. 2018-19, 2019-20, 2020-21 and 2021-22, for which direction has already been issued. Further, the Ld. DRP noted that the grounds of appeal filed by the assessee are similar to those filed for A.Y. 2021-22. In view of the above factual position the Panel members considered it appropriate to direct the AO to verify if the factual matrix and the issues involved were identical and if the said decisions have been accepted and no further appeal has been filed, the AO should follow the same. It further directed that if, however, further appeal has been filed, and the issue has Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 7 not yet attained finality, in order to keep the issue alive, the proposed variation made by the AO deserves to be upheld. The relevant directions of DRP in para no. 6 of its order are reproduced as under: “ 6. Directions of DRP: (i) The Panel has carefully considered the written submissions filed by the assessee and the DAO passed by the assessing officer. (ii) The Panel has noted that this is a legacy issue. This case came up before the Panel for AYs 2018-19, 2019-20, 2020-21 & AY 2021-22 for which directions have already been issued. The grounds of appeal filed by the assessee are almost similar to the grounds filed for AY 2021-22. (iii) As has been stated above the factual matrix of the case for the year under consideration is almost similar to AY 2021-22, in which the DRP has affirmed DAO passed by the AO. The assessee has submitted the Hon'ble Delhi High Court has passed the favorable order in assessee’s own case for A.Y. 2018-19 and 2019-20 and the Hon'ble ITAT has also passed the favorable order in assessee's own case for AY 2020-21 and 2021-22. Based on the above facts, the Panel members consider it appropriate to direct the AO to verify if the factual matrix and the issues involved are identical and if the said decisions have been accepted by the Revenue. If the decisions have been accepted and no further appeal has been filed, the AO should follow the same. However, if further appeal has been filed, and the issue has not yet attained finality, in order to keep the issue alive, the proposed variation made by the AO deserves to be upheld. In view of the above, the grounds of objections no. 1 to 8 stand rejected.” 5. Following the above directions, the AO passed the final assessment order u/s 143(3) r.w.s. 144C(13) of the Act, dated 02.01.2025, in which the AO observed that for A.Ys. 2018-19 and 2019-20, the revenue was in the process of filing Special Leave Petitions (SLP) before the Hon’ble Apex Court, and for the other years, the Revenue was in process of filing appeals before the Hon’ble Delhi High Court. The AO noted that it was clear that the revenue had not accepted the decision of the appellate authority in this case, and therefore, the total income of the assessee was Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 8 computed making an addition of Rs. 33,33,24,968/- as proposed in the draft assessment order. The relevant extract of the final assessment order in para no. 7 is reproduced as under: “ 7. Directions of DRP under section 144C of the Income Tax Act (i) TPO/AO are directed to complete the assassmont as per the above directions of the Dispute Resolution Panel (ii) In view of Section 144C(13) quoted below, TPO/AO are directed not to make any further Inquiries with the assessee- “ (13)Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153. the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.\" (iii) The TPO/AO shall place a copy of these directions as annexure to the final order, to be read as a part of the order. (iv) While passing the final order, TPOIAO shall incorporate the reasons given by the Dispute Resolution Panel in respect of various objections, at METAX DEPART at appropriate places in the final order. The Hon'ble DRP has directed that the stance of the Revenue in case of the orders of the Hon'ble ITAT/Hon'ble High Court in favour of the assessee be elaborated upon and the addition be sustained accordingly. In this case, for AYs 2018-19 & 2019-20, the Revenue is in the process of filing SLP before the Hon'ble Supreme Court against the order of the Hon'ble High Court. For AY 2020-21, the Revenue has filed further appeal before the Hon'ble High Court and for AY 2021-22, the Revenue is in the process of filing further appeal before the Hon'ble High Court Hence, it is clear that the Revenue has not accepted the decision of the appellate authorities in this case. Therefore, based on the above discussion the income of the assessee is computed as below: Computation of income of PE Particulars Amount End user License fee for software product Rs. 71,70,73.839/- Export of Goods Rs. 54,34,36,236/- Gross revenue Rs. 136,05,10,075/- profit @ 35% Rs. 47,61,78,526/- Profit attributable to PE in India taxable as Business income (70% of Business income) Rs. 33,33,24,968/- Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 9 6. Aggrieved by the said order, the assessee is in appeal before the Tribunal, on the following grounds of appeal: “ Based on the facts and circumstances of the case and in law, NCR Global Solutions Limited (\"Appellant) respectfully craves leave to prefer an appeal under section 253(1)(d) of the income-tax Act, 1961 (\"Act\"), against final assessment order dated 02:01 2025 (\"Impugned Order) issued under section 143(3) read with section 144C(13) of the Act passed by Ld. Deputy Commissioner of Income-tax, Circle-2(2)(2), International Tax. New Delhi (\"AO\") in pursuance of the Directions dated 10.12.2024 issued under Section 144C(5) by Ld. Dispute Resolution Panel-2. New Delhi (\"DRP\"), on the following grounds which are without prejudice to each other 1. Impugned order is invalid, null and void as the same is not in conformity with binding directions of Ld DRP as the Ld AO was directed to verify if any further appeal was filed Post decisions of Hon'ble jurisdictional High Court for AY 2018-19 and 2019-20 matter has attained finality as no details of further appeal are indicated. 2. Impugned order erred in making adjustment aggregating to INR 33,33,24,968 to the returned income of the Appellant and in assessing the total income of the Appellant at INR 59,75,58,558 2.1 Ld DRP's Directions are beyond jurisdiction, vague and not in conformity with section 144C(8). Without prejudice to above, Impugned order erred in making addition to keep matter alive by adopting approach in earlier years and 3. In proceeding on non/ incorrect appreciation of facts, submissions and material on record as also wrong interpretation and application of law and therefore, is bad in law 4. In alleging that Appellant has a Fixed place Permanent Establishment (\"PE\") for business in India, to carry on the business of sale of software products without indicating any basis for same. Further 4.1 Impugned order has failed to provide even a vague indication on why contentions of Appellant are incorrect and further in substituting imaginary facts as basis for alleging existence of fixed place permanent establishment in India to carry on the business. 4.2 Impugned order erred in ignoring relevant and complete facts brought on record explaining Appellant's business with Indian entity and proceeded on unsubstantiated and imaginary presumptions to hold existence of PE and Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 10 further perpetuated such error by attributing income on imaginary and baseless presumptions. 4.3 Impugned order erred in confirming existence of a Fixed place of business in India through NCR Corporation India Private Limited (\"NCR India\"), an independent legal entity conducting its own business, without indicating any basis and by overlooking material placed on record by the Appellant. 5. In alleging without any basis that NCR India is acting as an agent on behalf of the Appellant and concluding that it is constitutes agency PE of Appellant. 5.1. Presumptions that NCR India works mainly or wholly on behalf of the Appellant and that NCR India has authority to conclude contracts on behalf of the Appellant and NCR India habitually secures orders in India, mainly or wholly for the Appellant and is executing sales to India purchasers parties for and on behalf of the Appellant are totally baseless and incorrect 52 Impugned order failed in not appreciating that Appellant merely seits goods and software to NCR India on principal-to-principal basis and that NCR India is engaged in manufacturing of ATMs for its own business and alleging existence of PE 6. In failing to discharge burden of proof to establish existence of PE of any form in India 61 impugned order misinterprets Distribution agreement and reaches at perverse conclusion on existence of Agency PE and Fixed place PE by placing selective reliance on clause 6:1(b) and 6 1(d) ignoring all relevant facts and material on record. 7. Without prejudice to the above grounds of appeal, Impugned Order erred, in law and on facts, in attributing income to alleged PE without indicating any valid basis, purely based on speculations and without taking cognizance of the fact that profits/ income earned in relation to activities in India (by alleged PE ie NCR India), have already been offered to tax in India and which is at arm's length 8 Without prejudice to the above grounds of appeal, Impugned Order arred, in law and on facts, in attributing the profit to the alleged PE in India, in an arbitrary manner contrary to established principles 9. Without prejudice to the above grounds of appeal, Impugned Order erred, in law and on facts, in including consideration received towards sale of hardware (goods) while attributing income to the alleged PE without providing any basis/reasons for inclusion of such consideration 10. Impugned order alleged fixed place PE and agency PE of the Appellant in India only in respect of the software distribution activities but arbitrarily included hardware sale for attributing income to the alleged PE in India. Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 11 11. Without prejudice to the above grounds of appeal, Impugned Order has erred, in law and on facts, in taking 35% of the gross amount of international transactions as the net business income accruing from the business of Appellant in India, on an arbitrary basis without any indicating any basis/reasons 12. Without prejudice to the above grounds of appeal. Impugned Order has erred, in law and on facts, in arbitrarily considering 70% of the alleged business income to be attributable to the alleged PE in India, on the pretext that substantial sales and marketing activities are being carried out in India Other grounds: ---- xxxx ----- The Appellant submits that each of the above grounds is independent and without prejudice to one another. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with law.” 7. During the course of hearing before us, the Ld. AR submitted that the issue in this appeal was covered by a series of decision by the Co-ordinate Bench of Tribunal and Hon’ble Delhi High Court as per the following citations, in assessee’s own case: (i) NCR Global Solutions Ltd. vs. DCIT, in ITA No.- 1756 & 1776/Del/2022 for A.Y. 2018-19 & 2019-20, order dated 10.04.2023 of Co-ordinate Bench, (page no. 103-123 of the Paper Book) (ii) NCR Global solution Ltd. vs. DCIT, in ITA No.- 381/Del/2023, for A.Y. 2020-21, order dated 06.12.2023 of Co-ordinate Bench, (page no. 124-138 of the Paper Book) (iii) NCR Global solution Ltd. vs. DCIT, in ITA No.- 3230/Del/2023, for A.Y. 2021-22, order dated 25.07.2024 of Co-ordinate Bench, (page no. 159-172 of the Paper Book) (iv) Commissioner of Income Tax International Taxation-2, New Delhi vs. NCR Global Solutions Ltd., in ITA No.- 410/2024, order Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 12 dated 02.08.2024 of Hon’ble Delhi High Court (pg. no. 173-176 of Paper Book) (v) CIT vs. NCR Global Solutions Ltd., in ITA No.- 551/2024 & CM Appl. 66096/2024, CM Appl.- 66097/2024, order dated 13.11.2024 of Hon’ble Delhi High Court (page no. 177 -179 of the Paper Book) (vi) M/s NCR Global Solutions Limited vs. DCIT, in ITA No.- 1756/Del/2022 & 1776/Del/2022 for A.Y. 2018-19 & 2019-20 of Co-ordinate Bench (filed during the course of hearing) 8. The Ld. Sr. DR fairly accepted that this issue was covered in favour of the assessee by the aforesaid decisions. 9. We have heard both the sides and perused the material available on record and also considered the judgment of the Hon’ble Delhi High Court and the orders of the co-ordinate Bench of the Tribunal as referred above in assessee’s own case. The Hon’ble Delhi High Court in its judgment dated 13.11.2024 at Sr. No. (v) above in the appeal filed by the department against the order dated 06.12.2003, of the Co- ordinate Bench of the Tribunal, in para no. 4 held that the assessee does not have Permanent Establishment (PE) in India in the form of its subsidiary company and thereby upheld the decision of the Tribunal. Further, the co-ordinate Bench of the Tribunal, in assessee’s own case for A.Y. 2021-22 at Sr. No. (iii) above, also gave a categorical finding that the assessee does not have any PE in India in the form of subsidiary company, CIPL and accordingly allowed the ground of appeal filed by the assessee. This decision was followed by the Co-ordinate Bench of the Tribunal and in its latest order dated 27.09.2004 in assessee’s own case for A.Y. 2018-19 and Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 13 2019-20 at Sr. No. (vi) above. We further note that for assessment years 2018-19 and 2019-20, vide an earlier order dated 10.04.2023, the Tribunal had deleted the addition made on account of attribution of profits to the alleged Indian Permanent Establishment (PE) on the reasoning that when the international transactions between the parties were found to be at arm's length, no further attribution of profit can be made to the PE. However, the Tribunal in order dated 10.04.2023 at Sr. No. (i) above had inadvertently failed to adjudicate the primary issue regarding the existence of PE of the assessee through its non-exclusive dealer CIPL. Thus, while considering the miscellaneous applications filed by the assessee, the Tribunal, vide order dated 11th July, 2024, recalled the appeal order for the limited purpose of adjudicating the issue of existence or otherwise of PE and decided the issue in favour of the assessee by holding that assessee does not have a PE in India through its non exclusive dealer CIPL. The relevant extract of the said order of the Tribunal at sr. no. (vi) as above in para no. 3 to 10 are reproduced as under: “ 3. Be that as it may, as discussed above, the basic issue arising in these appeals is in relation to existence or otherwise of a PE of the assessee in India. Briefly, the facts relating to this issue are, the assessee is a non-resident corporate entity and is a resident of Ireland. As stated, the assessee is the principal distributor and licensor for software and hardware products and also related support services. It is further stated that assessee sells NCR software and hardware products and related support services through its affiliates. So far as India is concerned, assessee has appointed M/s NCR Corporation India Pvt. Ltd. (CIPL) as its non-exclusive distributor in exchange for payments for NCR's distribution activities. For the assessment years under dispute, the assessee had filed its return of income declaring certain items of income and offered them to tax at special rate of 10% as per the Double Tax Avoidance Agreement (DTAA) between India and Ireland. Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 14 4. In course of assessment proceedings, Assessing Officer observed that while the assessee had offered to tax the royalty for use of technology and brand, however, it has not offered revenue received from CIPL towards sale of software, export of goods, support services etc. He, therefore, called upon the assessee to show cause as to why the receipts from sale of End User licenses, being receipt from sale of software products, should not be treated as royalty and Fees for Technical Services (FTS) and made taxable on gross basis. In response to the show cause notice, assessee, relying upon various judicial precedents, submitted that since the end user licenses/software products are sold as off-the-shelf/ shrink wrapped software without transfer of use or right to use of copyright, the receipts cannot be treated as royalty or FTS but has to be treated as business receipts. The assessee further submitted that since it did not have any PE in India, such business receipts cannot be brought to tax in India. 5. The Assessing Officer, however, was not convinced with the submissions of the assessee. He was of the view that CIPL, since, works mainly or wholly on behalf of the assessee, it has to be treated as dependent agent PE of the assessee in India. Having held so, he proceeded to attribute profits to the said PE and accordingly, brought assessee's receipts to tax in India. Contesting the above said decision of the Assessing Officer, though, the assessee raised objections before learned DRP, however, it was without any success. Hence, challenging the final assessment orders passed in pursuance to the directions of learned DRP, the assessee is in appeal before us. 6. At the time of hearing, learned counsel for the assessee submitted that in assessee's own case in assessment year 2021-22, under identical facts and circumstances, the Tribunal has held that CIPL cannot be treated as the dependent agent PE of the assessee. In this context, he drew our attention to the observations made by the Coordinate Bench in the said order. 7 Learned DR, though, agreed that the issue whether CIPL can be treated as a dependent agent PE of the assessee has been decided in favour of the assessee in assessment year 2021-22. however, he relied upon the observations of the Assessing Officer and learned DRP. 8. Having considered rival submissions and perused materials on record. we find, while deciding identical issue in assessee's own case in assessment year 2021-22, the Tribunal, in order dated 26th July, 2024 in ITA No.3230/Del/2023, while deciding the issue as to whether CIPL can be held as a dependent agent PE of the assessee, has held as under:- 15. As we appreciate the matter on record, the important piece of evidence is the distribution agreement executed between the assessee and NCR India made available at pages 49-63 of the paper book. This agreement defines in the preamble that: \"WHEREAS, GSL develops, manufactures, markets, installs, licenses and services business information processing equipment software and related products and-desires that such equipment and software be sold to customers in the Territory: Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 15 WHEREAS, Distributor conducts sales and service activities in the Territory; and WHEREAS, GSL and Distributor desire to have Distributor act as distributor of GSL's Hardware and licensee of GSL's Software in the Territory:\" 16. The agreement further provides that 2.1 Appointment. NCR appoints Distributor as the nonexclusive distributor of the Hardware and licensee of Software in the Territory, NCR further grants Distributor the non-exclusive right to provide NCR-authorized service in the Territory for Hardware and Software released for sale or license through the Distributor. The rights granted herein apply to both currently released and future Hardware and Software, but Distributor shall not advertise any new Hardware or Software without NCR's prior written consent. Distributor shall limit its marketing of Hardware and Software to Customers located within the Territory. 2.2 Reservation of Rights to NCR. NCR reserves the right to enter the Territory and sell, lease or service Hardware or license or service Software, directly or indirectly and to appoint other distributors within the Territory. Distributor shall be entitled to credit or compensation for any such direct or indirect activities Distributor performs within the Territory which facilitate the sale. lease or service of Hardware and license or service of Software by NCR within the Territory.\" 17. As we go through the obligations and distributorship covenants described in section 6 of the agreements, we find that for the local markets these two parties had agreed as follows:- \"b. Local Markets. Distributor shall make such changes to any Hardware and Software that NCR deems appropriate to adapt such Hardware and Software for use in the Territory. Distributor shall be responsible for translating NCR materials into the languages of the Territory and shall be responsible for making such changes to the Hardware and Software, manuals, and promotional materials as are required to comply with the laws of the Territory. Distributor hereby assigns to NCR all of its rights in such Hardware and Software and documentation adaptations including but not limited to, all local language translations of NCR materials, advertising and promotional materials, and in related patents and copyrights. Distributor hereby appoints NCR as its attorney in fact to execute all documents necessary to effect this assignment.\" 18. Further, with regard to the business operations, it was agreed as follows:- \"6.3 Business Operations. The business and other operations of Distributor under this Agreement shall be solely under the control, direction and management of the Distributor. Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 16 a. Expenses. Distributor shall be solely responsible for its own expenses and employees and agents and shall provide at its own expense, such office space and facilities, and hire and train such personnel, as may be required to effectively carry out its obligations pursuant to this Agreement. Distributor agrees that it shall incur no expense chargeable to NCR except as may be authorized in advance. remises and Staff. Distributor agrees to maintain properly equipped and located premises with suitable fixtures and a competent staff of marketing personnel dedicated to the promotion and sale of products. Distributor shall employ trained. competent technicians, field engineers, programmers, analyst and other maintenance personnel to service all Hardware and Software within the Territory.\" 19. Then, section 11.1 of this agreement defines the relationship of the parties as follows:- \"11.1 Relationship of Parties. Distributor is an independent purchaser of Hardware and licensee of Software. During the term of this Agreement, the relationship of the Parties is and shall remain that of independent contractors. Distributor shall not be considered, an agent or legal representative of NCR for any purpose, and neither Distributor nor any director, officer, agent, or employee of Distributor shall be, or be considered, an agent or employee of NCR. Distributor is not granted, and shall not exercise, the right or authority to assume or create any obligation or responsibility, including without limitation. contractual obligations and obligations base on representations, warranties, guaranties on behalf of or in the name of NCR.\" 20. As we take into consideration the aforesaid, we have no doubt in our mind that the NCR India was appointed out rightly as a distributor with non- exclusive rights of service for hardware and software released for sale or licence to the distributor. The definition of hardware provided in clause 1.6 of the agreement establishes that the assessee was to sell the hardware to the NCR India for resale pursuant to this agreement. This resale signifies that the property in these products stood transferred to NCR India and what NCR India got was merely right to provide services in the territory to the hardware sold by the assessee. 21. It appears the AO has randomly picked up certain part of the terms of obligation of distributor regarding local markets to hold that the distributor was given rights to execute all documents. As for the purpose of Article 5(6) of the DTAA, there is nothing to establish that NCR India under the agreement has and habitually exercises an authority to conclude contracts for and on behalf of the assessee or maintained stock or goods on behalf of the assessee or otherwise secured orders in India for the assessee. The assessee merely sold hardware and softwares on a non-exclusive basis to NCR India which are used by NCR India as raw material in manufacturing of ATMs or the same are directly sold to third party customers/sub-distributors. The ATMs manufactured by NCR India as well as the hardware and software procured Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 17 by NCR India from the assessee are sold by NCR India to its customers on its own account and not on behalf of NCR. 22. Then, there is no absolute findings on the basis of any material that the assessee had any place of business in India which was fixed in terms of permanency or if any employees of the assessee resided in India were at the disposal of NCR India. 23. Thus, we have no hesitation to conclude that authorities below have fallen in error to hold the existence of assessee's PE in India in the form of CIPL. In the result, the grounds are sustained and the appeal filed by the Assessee is allowed.\" 9. Factual position in the impugned assessment years being identical. respectfully following the decision of the Coordinate Bench, as noted above. we are inclined to hold that CIPL cannot be treated as a dependent agent PE of the assessee in India. Grounds raised by the assessee in this regard are allowed. 10. In the result, both the appeals of the assessee are allowed as indicated above.” 10. The present cases are identical to the facts in the case of the assessee for A.Ys. 2018-19, 2019-20, 2020-21 & 2021-22, and therefore, in the view of above cited decisions, we hold that the assessee does not have PE in India, through it non- exclusive distributor CIPL and also cannot be treated as dependent agent PE of the assessee in India. The Ld. CIT(DR) has also not brought any contrary facts or any favourable decision in its support. Accordingly, we delete the addition of Rs. 33,33,24,968/- made by the AO and allow the ground nos. 4 to 6 of the appeal. Accordingly, the other grounds of appeal on issue i.e. 1,2,3 and without prejudice grounds being ground no. 5, 7 to 12 become academic and are kept open in this case. 11. The ground no. 13 of the appeal is reproduced as under: Impugned order has erred, in law and on facts, in considering INR 16,200, purported to be tax deduction at source (\"TDS\") by Revenue on interest towards income-tax, refund which is not issued to be appellant. Printed from counselvise.com ITA No.-1885/Del/2025 NCR Global SoluƟons Ltd. 18 11.1 The AO is directed to verify the above claim of the assessee and pass necessary action as per law. Accordingly, ground no. 13 is partly allowed. 12. The ground no. 14 of the appeal is reproduced as under: 14. Ld. AO has erred, in law and on facts, in imposing interest under section 2348 and initiating penalty proceedings under section 270A of the Act. 12.1 Ground no. 14 relates to the initiation of penalty proceedings under section 270A of the Act. This ground of appeal is premature. Accordingly, this ground is dismissed as premature. 13. In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on 30th October, 2025. Sd/- Sd/- [VIKAS AWASTHY] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 30 .10.2025. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "