Fixed place permanent establishment not established on the facts, so profit attribution from DMRC contracts was deleted.

The Tribunal examined whether Bombardier Transportation India Ltd. constituted a fixed place permanent establishment in India for the assessee and whether profits from the DMRC contracts could be attributed to it. It found that the earlier-year reasoning had proceeded on an incorrect appreciation of the contract facts and the role of the alleged seconded employee, and that the record did not establish a place of business in India through BTIN from which the assessee carried on business. Finding factual parity with the coordinate bench decision on the same controversy, the Tribunal accepted the assessee's challenge, held that BTIN was not a fixed place permanent establishment for the relevant contracts, and deleted the revenue's profit attribution.

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Issues: Whether Bombardier Transportation India Ltd. constituted the assessee's fixed place permanent establishment in India and whether the income from the DMRC contracts could be attributed to such alleged permanent establishment.

Analysis: The assessment and first appellate orders had followed the earlier year's findings on the same controversy. On comparison of facts, the Tribunal held that the earlier reasoning proceeded on erroneous appreciation of the contract facts and the role of the alleged seconded employee. The Tribunal found that the assessee had no place of business in India through BTIN from which it could have carried on business, and that the factual basis for treating BTIN as a permanent establishment was not established on the record for the year under appeal. Following the coordinate bench decision on the same issue and finding factual parity, the Tribunal accepted the assessee's challenge.

Conclusion: BTIN was not treated as the assessee's fixed place permanent establishment in India for the relevant contracts, and the profit attribution made by the Revenue was deleted. The appeal was allowed in favour of the assessee.

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