Existence of PE (Permanent Establishment) a matter of fact to be proven by revenue - offshore delivery of goods is not taxable in India

Facts:

Assessee, a UK entity was given the responsibility to deliver goods offshore arising out of a consortium contract with ONGC. Due a survey under section 133(6) at ONGC it was alleged that offshore delivery of goods was held to be taxable for the assessee as the consortium created a PE as per the Indo-UK DTAA. Revenue however did not establish how the PE had got triggered for the assessee. It was also held that the offshore delivery of goods was  taxable under section 44BB. On appeal DRP upheld the views of the AO. On further appeal -

Held in favour of the assessee that there was no PE for the assessee as revenue had failed to establish how the PE was created in the first place. The offshore delivery of goods was not taxable under section 44BB either and it was outside the ambit of tax in India.

Ed. Note: Establishing existence of PE is a sine qua non before trigger of PE taxation.

Case: Baker Hughes Energy Technologies UK Ltd. v. ACIT 2023 TaxPub(DT) 3455 (Del-Trib)