2026 (5) TMI 102

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... "2.1 The appellant is a non-resident foreign company incorporated in the USA and is engaged in providing a wide range of petroleum consulting services to clients worldwide in the oil and gas industry. It filed the return of income on 05.02.2021 declaring total income as Nil. The case was taken up for scrutiny. 2.1 During the year under consideration, the appellant has earned revenue from multiple contracts with Oil and Natural Gas Corporation of India (ONGC) and Oil India Limited (OIL) for rendering various petroleum consulting services in India. The receipts totaled to INR 147,620,042 (INR 85,335,612 from ONGC and INR 62,284,430 from OIL) 2.2 The AO issued a show-cause notice that since the contract deliverables are f....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the assessee has not substantiated its contentions regarding stay in India by way of the any documentary evidences such as passport etc. of the employees. The assessee has only submitted during appeal an unsigned document specifying the period of stay of various employees. Before the ITAT Before us, assessee argued that given an opportunity, the complete details would be submitted to the ld. CIT(A). The ld. DR opposed to the proposal in principle. Having considered the matter, we hold that no prejudice would be caused to the Revenue by remanding the matter to the file of the ld. CIT (A) to examine and complete the correct period of stay considering the documents specifying the period of stay." 3. After the order of the Tribunal in ITA N....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... aggregate cumulative period of stay of the employees in India during the FY 2019-20 totalled to 181 days leading the then CIT(A) to hold that the stay was of more than 180 days. However, on comparison of the above details vis-à-vis the details of date wise stay reproduced at para 5.2 above, it is noted that there has been several common days of stay where more than one employee was present in India simultaneously on same days. This has led to a situation where though the unique solar days the employees were present in India is less than 90 days (72 days in Total including 8 days for personal vacation visit of one employee), however the cumulative man days, counting the common days multiple times for each employee, exceed 90 days (18....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of solar days vs. man days has already been decided by several ITATs, including the jurisdictional Delhi ITAT, in favour of the assessee. The appellant has placed reliance on the following decisions in this regard: (i) Hon'ble Mumbai ITAT in the case of Booz & Company (ME) FZLLC [TS-27-ITAT2018(Mum)] (ii) Hon'ble Bangalore ITAT in the case of Electrical material Center Co. Ltd. [TS-451- ITAT-2017(Bang)] (iii) Hon'ble Delhi ITAT in the case of Clifford Chance Pte. Ltd. [ITA no. 2681 & 3377 of 2023] Relevant part of the decision of the Hon'ble Delhi ITAT in the case of Clifford Chance Pte. Ltd. vs. ACIT reported as [2024] 160 taxmann.com 424 (Delhi-Trib.) dated 14.03.2024 is extracted below for ready refer....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....days as well as common days comprising of 5 days which in our considered view should be excluded while computing the threshold of service PE as no services were provided to customers in India on the days spent on business development activities and the computation of threshold should not be based on man days by aggregating common days spent by more than one individual. In effect, the services have been furnished by the assessee only for 44 days in India after excluding vacation period, Business Development days and common days and accordingly the assessee does not constitute service PE in India as per India-Singapore DTAA during the AY 2020-21." 5.10 Respectfully following the above quoted decision of the jurisdictional ITAT Delhi,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Article 7 of the DTAA. The impugned addition of Rs. 1,47,62,005 is, accordingly, hereby deleted." 7. The solitary issue involved in the present Appeal is that, while computing the period for which the activities of providing petroleum consultancy services by the Appellant continued in India through the presence of its Employees in terms of Article 5(2)(i) of the India-US DTAA, whether unique solar day to be considered or the cumulative man days. 8. The Co-ordinate Bench of the Tribunal in the case of Clifford Chance PTE Ltd. Vs. ACIT vide order dated March 14th 2024, decided the issue in favour of the Assessee. Further, the order of the Tribunal in the case of Clifford Chance PTE Ltd. Vs. ACIT (supra) has been affirmed by Jurisdicti....