IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘D’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.2042/DEL/2025 [Assessment Year: 2022-23]

UK Grid Solutions Limited, The Deputy Commissioner of Income ST Leonards Building, Harry Tax, Circle International Taxation Kerr Dive, Stafford ST16 1WT, Vs -3(1)(1), Civic Centre, Minto Road United Kingdom-99999 New Delhi-110002 PAN-AAICA6271A Assessee/Appellant Revenue/Respondent Assessee by Shri Aditya Vohra, Adv.

Shri Arpit Goyal, CA Revenue by Shri M.S. Nethrapal, CIT-DR Date of Hearing 13.08.2025 Date of Pronouncement 10.11.2025

ORDER

PER VIKAS AWASTHY, JM This appeal by the assessee is directed against the Assessment Order dated 27.01.2025 passed u/s 143(3)/144C(13) of the Income Tax Act, 1961 (hereinafter ‘the Act’), for Assessment Year 2022-23.

2. The gist of the issues raised by the assessee in appeal is as under:-

GOA ISSUES No.

3. Taxability of Offshore supplies in India

4. Appellant had business connection in India

5. Single composite contract was artificially split into three separate contracts

6. There exists fixed place PE in India

7. There exists dependent agent PE in India

7. There exists Construction PE in India

8. No evidence brought on record by AO for existence of PE

9. Attribution of 100% profits from offshore supplies to the alleged PE

10. Application of section 44BBB of the Act

11 to 13 Offshore supply receipts from GETDIL and SFO Technologies, not related to PGCIL Contract

14 Global operation fee taxable as FTS

3. Shri Aditya Vohra, appearing on behalf of the assessee, at the outset, submitted that the assessee is not pressing ground no.2 of appeal challenging validity of assessment order on the ground of limitation.

3.1. Narrating facts of the case ld. Counsel for the assessee submits that, the assessee is a tax resident of the United Kingdom and holds valid TRC for the impugned assessment year. The assessee is engaged in the business of designing, engineering, manufacturing and supply of electric equipment. The assessee was awarded tenders by Power Grid Corporation of India Limited (in short ‘PGCIL’ )for offshore supply of goods for setting up a 3000 MW HVDC Terminal Package associated with Western/Northern Region Interconnector for IPP Projects in Chhattisgarh under ‘National Grid Improvement Project” and upgradation of 3000 MW HVDC Terminals at Champa Pooling Station and Kurukshetra to 6000 MW under strengthening in WR-NR transmission corridor for IPP Projects in Chhattisgarh. The scope of contract includes complete project management, design, engineering, manufacturing, testing, supply, port handling and custom clearance for plant and equipments including spare parts, inland transportation, staff training, testing, erection/installation related civil work, and commissioning including performance testing of plant and equipment. A single composite contract was awarded to the assessee on turnkey basis. After award of single contract, the said contract was divided into three contracts i.e. :

i. Off-shore contract: For supply of plant and equipment including spares outside India (First Contract)

ii. On-shore supply contract: For supply of plant and equipment including spares and testing within India (Second Contract)

iii. On-shore service contract: To perform all services and civil work, testing and commissioning including training of personnel in India (Third Contract).

3.2. The ld. Counsel submits that even though the main single contract was artificially divided into three sub-contracts by the assessee, all the responsibilities and liabilities of the project were vested with the assessee. The assessee had claimed before the Assessing Officer that it has only been awarded the first contract for Off-shore supply of plant and equipment including spares outside India for execution. The second and third contract have been awarded to its Indian Associates i.e. GE T&D India Ltd. (in short GE T&D India). The assessee has no ro