TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether receipts from offshore supply to THDC were taxable in India on the basis of an alleged business connection, fixed place PE, construction PE and section 44BBB attribution; (ii) Whether receipts from offshore supply received from GEPIL were taxable in India; (iii) Whether levy of interest under section 234B survived.
Issue (i): Whether receipts from offshore supply to THDC were taxable in India on the basis of an alleged business connection, fixed place PE, construction PE and section 44BBB attribution.
Analysis: The project was executed through separate contracts under the consortium arrangement, and the offshore supply contract was separate, with title to the goods passing outside India on FOB terms and consideration received outside India. The record did not establish that the assessee had a fixed place at its disposal in India for core business functions, nor was any material brought to prove a construction PE. In the absence of a business connection or a PE in India, profits from offshore supply could not be attributed to India, and section 44BBB could not be invoked for such offshore receipts.
Conclusion: The addition made in respect of offshore supply receipts from THDC was deleted in favour of the assessee.
Issue (ii): Whether receipts from offshore supply received from GEPIL were taxable in India.
Analysis: The same reasoning applied to the THDC receipts governed this receipt also. Since the assessee had not been shown to have a taxable presence in India for the offshore supply activity and the receipt arose from supply completed outside India, the amount could not be brought to tax merely because the Indian entity was involved in the transaction chain.
Conclusion: The addition in respect of receipts from GEPIL was deleted in favour of the assessee.
Issue (iii): Whether levy of interest under section 234B survived.
Analysis: The challenge to interest was consequential to the taxability findings and did not involve an independent substantive determination.
Conclusion: The ground was partly allowed to the limited extent of consequential recomputation in accordance with law.
Final Conclusion: The assessee succeeded on the core merits regarding taxability of offshore supply receipts, while the interest issue remained only to the extent of consequential recalculation, resulting in a partly allowed appeal.
Ratio Decidendi: Offshore supply income is not taxable in India where the sale is completed outside India, title passes outside India, and the Revenue fails to establish a business connection or a permanent establishment in India; in such circumstances, section 44BBB cannot be applied to tax the offshore receipt.
TaxTMI 
