In this case it has been held that the goods were sold from outside India. The risk and title were also transferred outside India and no transaction took place in India. Customs clearance and inland transportation were also done by buyer on its own and the assessee was at no stage involved in the activities. There was no permanent establishment involved in the sale. In fact supervision was done after the supply of equipment. The Department could not establish that the assessee had a fixed place permanent establishment or supervisory permanent establishment in India. Hence, income from such transaction is not chargeable to tax in India. (AY. 2001-02 to 2004-05, 2007-08, 2010-11 to 2012-13)
Sumitomo Corporation v. Dy. DIT (2019)73 ITR 443/ (2020) 205 TTJ 815 (Delhi)(Trib.)
S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Supply of equipment-sale from outside India-Risk and title transferred outside India and no transaction taking place in India-Customs clearance, inland transportation done by buyer on its own-No permanent establishment involved in sale–Income is not taxable in India-DTAA–India–Japan [S. 44D, Art. 7, 24]