Assessee, a tax resident of China, received certain amount of consideration on account of offshore supply made to Indian PSU’s. Assessing Officer, allocated 60 per cent of total receipts towards supply of equipment and 40 per cent towards fee for technical service (FTS) and made additions. DRP up held the addition. on appeal following the order of Tribunal in assessee’s own case for earlier assessment years in Jiangdong Fittings Equipments Co. v. ACIT (International Taxation) [2023] 157 taxmann.com 109 (Delhi ( Trib.) on similar issue had held that supply of goods and equipments was completed outside India and transfer of title over goods had passed from non-resident assessee to Indian PSU’s outside India in terms with contract, receipts from such supply could not be made taxable in India. Tribunal directed the Assessing Officer to delete the addition. following aforesaid order, Assessing Officer was to be directed to delete impugned additions. (AY. 2020-21)
Jiangdong Fittings Equipments Co. Ltd. v. ACIT (2024) 206 ITD 344 (Delhi) (Trib.)
S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Business profits-Offshore supplies-Fees for technical services-Supply of goods and equipments was completed outside India-Transfer of title over goods had passed from non-resident assessee to Indian PSU’s outside India-Receipts from such supply could not be made taxable in India-DTAA-India-China. [S.9(1)(vii), Art. 7]