The case ITA No. 1969/DEL/2022 involves AB Sciex Pte Ltd, a Singapore-based company, against the Assistant Commissioner of Income Tax, Circle International Taxation 1(1)(1), New Delhi, focusing on the assessment year 2019-20. The primary issue is the dispute over the existence of a Permanent Establishment (PE) in India and the related tax implications.
AB Sciex Pte Ltd is engaged in the business of manufacturing and selling scientific research instruments and providing related services. The Indian tax authorities contended that AB Sciex had a Permanent Establishment in India through its association with DHR Holding India Pvt. Ltd., which should impact the taxation of revenues earned in India.
The proceedings re-examine the findings of the previous year, which concluded that DHR Holding did not constitute a PE. Despite this, the tax authorities pursued the same line of argument for the subsequent year, asserting that similar operations led to taxable presence in India.
The Tribunal reaffirmed its earlier decision, stating that AB Sciex did not have a PE in India as per both domestic law and the applicable tax treaty. It emphasized that without a PE, no additional profits could be attributed to the non-existent PE, effectively dismissing the tax authorities’ claims for the assessment year 2019-20.
This decision is significant as it upholds the principles of tax treaty and international tax norms, ensuring fair treatment of multinational corporations operating in India. It highlights the need for consistency in the application of tax laws and the recognition of judicial precedents.
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