{"id":61277,"date":"2026-06-27T11:42:45","date_gmt":"2026-06-27T06:12:45","guid":{"rendered":"https:\/\/itatonline.org\/digest\/sms-siemag-ag-v-deputy-dit-2025-122-itr-534-173-taxmann-com-403-delhi-trib\/"},"modified":"2026-06-27T11:42:45","modified_gmt":"2026-06-27T06:12:45","slug":"sms-siemag-ag-v-deputy-dit-2025-122-itr-534-173-taxmann-com-403-delhi-trib","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/sms-siemag-ag-v-deputy-dit-2025-122-itr-534-173-taxmann-com-403-delhi-trib\/","title":{"rendered":"SMS Siemag AG v. Deputy DIT (2025) 122 ITR 534 \/ 173 taxmann.com 403 (Delhi.)(Trib.)"},"content":{"rendered":"<p>The assessee, a German company, engaged in supply of plants, equipment and technical services in the metallurgical sector, had entered into contracts with Indian clients. The AO treated the consideration received for (i) drawings and designs, and (ii) offshore supply of plant and equipment, as taxable in India under S. 9(1)(vii), treating it as &#8220;fees for technical services&#8221; (FTS). A reimbursement towards SAP installation was also brought to tax. The Tribunal noted that these issues had already been decided in favour of the assessee for earlier years (A.Ys. 2005-06, 2014-15 and 2017-18) in ITA No. 1073\/Del\/2014. Relying on principles of judicial consistency and following the decision in <em>SMS Concast AG v. DDIT (ITA No. 1361\/Del\/2012)<\/em>, the Tribunal held that sale of drawings and designs is inextricably linked to offshore supply of equipment and is not a separate service. Further, offshore supply of equipment is a sale completely outside India and could not be taxed as FTS or royalty in the absence of a PE. The reimbursement for SAP installation was also held as not taxable in absence of rendering any technical service. However, the Tribunal remanded the matter to the AO for limited verification and reconciliation of the drawings and designs with the relevant projects, giving three effective opportunities to the assessee to explain and prove the linkage. (AY. 2007-08 to 2016-17)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 9(1)(vii): Income deemed to accrue or arise in India-Royalty\/FTS-Foreign company-Taxability of (i) receipt from sale of designs and drawings and (ii) Offshore supply of plants and equipment-Reimbursement for SAP installation-No PE-Not taxable as FTS or royalty-DTAA-India-Germany.[Art. 12] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-61277","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fWl","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=61277"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61277\/revisions"}],"predecessor-version":[{"id":61278,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61277\/revisions\/61278"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=61277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=61277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=61277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}