Existence of Place, Service, Agency and Project PE based on survey documents and attribution of income - Indo-China DTAA

Facts: Arising out of a survey operations various documents were collected by the department alleging which revenue alleged existence of a Place, Project, Service and Agency PE for the Chinese assessee thru its Associated Entity Huawei India. Accordingly attribution of income was done for offshore delivery of goods, project activities carried out in India, ignoring the stand that the activities off Huawei India were only supportive and auxiliary activities not triggering a PE. DRP upheld the existence of various PE's for the assessee. On higher appeal -

Held based on the earlier year orders of ITAT of the assessee that the presence of PE was confirmed based on detailed discussion, besides considering number of documents of the assessee. The remuneration of AE at arm's length would absolve the further attribution of income for the assessee also could not be established by the assessee.

Ed. Note: The case demonstrates that in a survey operation even if loose documents are collected and are used in reading a PE, then it becomes hard to establish to rebut the presumption. The earlier year precedences worked against the assessee.

Case: Huawei Technologies Co. Ltd. v. ACIT 2023 TaxPub(DT) 1478 (Del-Trib)