#Section 44BB

The ITAT Delhi ruled that offshore supply of goods by a UK-based company, with no physical presence or control in India, cannot be taxed under Section 44BB’s presumptive regime. The Revenue failed to prove a permanent establishment under the India-UK Tax Treaty, reinforcing that mere contract execution or remote supervision does not create taxable nexus. This sets a critical precedent for multinational energy and engineering firms operating across borders without local infrastructure.

ITAT Delhi clarifies that only unique solar days of employee presence in India count toward the 90-day threshold for Service Permanent Establishment under Article 5(2)(l) of the India-US DTAA, rejecting the Revenue’s cumulative man-day approach. This ruling impacts foreign companies providing services in India, ensuring tax liability is determined by actual presence rather than aggregated workdays.