INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1591/Del/2022 (Assessment Year: 2017-18) ITA No. 1592/Del/2022 (Assessment Year: 2018-19)

ITA No. 993/Del/2023 (Assessment Year: 2020-21)

ITA No. 3297/Del/2023 (Assessment Year: 2021-22)

ITA No. 377/Del/2025 (Assessment Year: 2022-23)

SMS Group Gmbh, Vs. ACIT, C/o. Mohinder Puri & Co, CAs, Circle-3(1)(2), 1A-D, Vandhna Building, 11, International Taxation, Tolstoy Marg, New Delhi-110001 New Delhi (Appellant) (Respondent)

PAN: AADCS1173J Assessee by : Shri Percy Pardiwala, Sr. Adv Shri C. S. Mathur, CA Ms. Richa Agarwal, CA Revenue by: Shri M. S. Nethrapal, CIT DR Date of Hearing 12/11/2025 Date of pronouncement 24/12/2025

O R D E R

PER BENCH:

1. The Assessee SMS Group Gmbh (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 23.05.2022 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (for short ‘the Act’) in consonance with the order passed by the Dispute Resolution Panel (DRP)

dated 17.03.2022 u/s 144C(5) of the Act.

2. Identical issues are involved and hence they are taken up together and disposed of by this common order for the sake of convenience.

ITA No. 1591/Del/2022 for AY 2017-18 (Assessee’s appeal)

3. The Ground Nos. 1, 2 and 11 raised by the assessee are general in nature and does not require any specific adjudication.

4. Ground Nos. 3 to 6 raised by the assessee are challenging taxability of supply of equipment and designs in India as per the provisions of the Act and as per the treaty.

5. We have heard the rival submissions and perused the materials available on record. The assessee is a tax resident of Germany, engaged in a business of supply of plants & equipments, supply of drawings and designs and rendering supervisory services in erection, commissioning, performance guarantee, test of equipment supply; and rendering technical services to the customers in metallurgical sector in various parts of the country. During the year under consideration, the assessee has received consideration from customers in India towards the following:-

a. Offshore supply of design and engineering:

b. Offshore supply of equipment and parts;

c. Onshore supervision services d. Other Technical Services e. Cost reimbursement towards SAP/ Intranet It is not in dispute that all the equipments supplied to various customers are designed, manufactured and fabricated according to each customer's requirement at assessee's factories outside India alongwith the drawings and designs which are also supplied from outside India. The assessee has no office, factory or workshop in India. All the agreements, as entered by the assessee with customers in India, provides separate scope of work and price payable towards:-

➤ Design, manufacture and delivery of plant, equipment, from Germany:

➤ Supply of drawings, documents, designs of the plant and equipment from Germany:

➤ Supervision of erection and commissioning of the plant, equipment by deputation of personnel at site. )

6. All functions in relation to the supply/sale covering purchase of material, parts, fabrication, manufacture of the plant, sale, delivery, transportation are carried out from assessee’s office located outside India. The assessee has furnished all the agreements for drawing, designs, fabrication, manufacture of plant and equipment that took place in Germany before the lower authorities. It was submitted that on perusal of the contracts and agreements, it could be confirmed that -

A. design, fabrication, manufacture of plant and equipment took place in Germany;

B. supply/ delivery took place in Germany involving transfer of title/risk to the customers outside India;

C. payment was received outside India.

7. The explanation given by the assessee before the ld AO with regard to the consideration received for each of the activity are as below: –

a) Receipt