Permanent establishment absence bars profit attribution in India for offshore supply receipts under the DMRC contract.

Offshore supply receipts under the DMRC contract were held not taxable in India because the assessee had no taxable permanent establishment on the facts considered. The Tribunal found no material distinction from earlier years, noted that the Revenue relied on DRP findings already reversed in the assessee's own case, and applied consistency with prior coordinate bench rulings. As no distinguishing feature was shown for the year under appeal, the attempted treatment of BTIN as a permanent establishment and the resulting attribution of profits in India could not stand. The PE finding and consequential income attribution were set aside.

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Issues: Whether the assessee's receipts from offshore supply under the DMRC contract were taxable in India in the absence of a Permanent Establishment, and whether the Revenue authorities were justified in treating BTIN as the assessee's Permanent Establishment and attributing profits to it.

Analysis: The dispute turned on whether the factual matrix for the year under consideration differed from the earlier years in which the coordinate bench had already decided the same PE issue in the assessee's favour. The Tribunal found that no distinguishing feature was shown for the relevant year and that the Revenue authorities had proceeded by relying on earlier DRP findings which had already been reversed in the assessee's own case. On parity of facts, the Tribunal followed its earlier and subsequent orders, holding that the assessee did not have a taxable PE in India on the facts considered and that the impugned attribution of income could not stand.

Conclusion: The PE finding and the consequential attribution of income were set aside, and the assessee succeeded on the substantive taxability issue.

Ratio Decidendi: Where an identical PE issue on materially the same facts has already been decided in the assessee's favour and no distinguishing feature is shown for the year under appeal, consistency requires following the earlier coordinate bench decision and rejecting attribution of profits in India absent a taxable PE.

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