Appellate Tribunal held that the GE Energy Parts Inc. had a fixed place Permanent Establishment ( PE) and Dependent agent PE ( DAPE) in India   under the DTAAand liable to file income tax returns in India .At the time of hearing following questions of law were framed for consideration was ;
“(1) Did ITAT fall into error in its findings with respect to existence of a fixed place Permanent Establishment (PE) of the assessee in India?

(2) Did ITAT fall into error in concluding that the assessee/appellants separately had an independent agent PE, located in India; and,

(3) Whether on the facts and the circumstances of the case and the law, the ITAT was justified in attributing as high as 35% of the profits to the alleged marketing activities and thereafter, attributing 75% of such 35% profits to the alleged PE of the Appellant in India Submission of parties”

The Appellant submitted that the technology and not marketing enabled it to be successful in their business . Since products are so sophisticated, marketing is a minimal component of the sale. All strategy decisions reside with the applicant outside India – work in India is only limited to providing market inputs and interface. In this case, the LO is only collecting information about potential customers in India and passing on this information to its non-resident businesses; and creating awareness of the business products. After considering the Articles 5(1) to 5(3) of India-USA DTAA and referring to all judgements and pronouncements from the OCED Commentary and eminent authors the Court  answered all the questions in favour of the revenue. Court held that ,facts of the  case clearly point to the fact that the assessee’s employees were not merely liaisoning with clients and the headquarters office. E-mail communications and chain mails indicate that with respect to clients and possible contracts of GE with Reliance CS-1, GE Oil & Gas, Bongaigaon Refinery, Draft LOA for WHRU (E-mail from Andrea Alfani (GE Overseas) to Vivek Venkatachalam (GEIIPL) and Riccardo Procacci (GEII) on proposed  & connected matters  mail to send Reliance, including comments to RIL on the proposed letter of acceptance and relevant attachments. Also, asked them whether they wanted to send the e-mail themselves to RIL or for it to be sent directly.These appear to show important role for Vivek and Riccardo in the negotiating process .These suggest that substantive work on the BHEL contract was done in India by amix of GE overseas and GE India team – Kind of activity  i.e . manufacture and supply of highly specialised and technically customised equipment , the “ core activity “ of developing the customer (identifying a client) approaching that customer , communicating the available options , discussing technical and financial terms of the agreement , even price negotiations , needed collaborative process in which the potential client along with GE’s India employees and its experts , had to intensely negotiate the intricacies of the technical and commercial parameters of the articles etc . Considering all the aspects the it is clearly revealed that the GE carried on business in India through its fixed place of business ( i.e. the premises ) through premises .  Accordingly the order of the Tribunal is affirmed .   The assessee cannot selectively quote on certain parts of the commentary, rather, must read the spirit of the entire commentary.   ( ITA 621/2017 dt. 21.12.2018) (connected matters)  ( AY.2001-02) (Note . Order in  GE Energy Part Inc v. ADDIT ( 2017) 56 ITR 51 ( Delhi) (Trib) is affirmed .)