TaxTMI 
TaxTMI 
2012 (8) TMI 450
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....to the previous year ended 31 March 2003, in the case of Sumitomo Mitsui Banking Corporation - an Indian branch of Sumitomo Mitsui Banking Corporation, Japan having banking business in India (hereinafter referred to as 'the Appellant')] on certain grounds. The Appellant's Grounds of Appeal against the order of the CIT(A) are specifically stated below: 1. Rate at which tax is leviable The CIT(A) erred in confirming the AO ' s action of taxing the Appellant at the rate normally applicable to non-resident companies. The Appellant submits that considering the facts and circumstances of its case and the Agreement for Avoidance of Double Taxation between India and Japan (DTAA), the rate at which tax should be levied on it should not be more than the rate at which an Indian Company similarly placed and carrying on similar activities (viz a company in which the public are substantially interested) is taxed and the CIT(A) ought to have directed the AO accordingly. The Appellant submits that the AO be directed to levy tax on the Appellant at the rate applicable to Indian Companies in which public are substantially interested. 2. Disallowa....
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....ome of the assessee is subject to TDS uls.195 of the I.T. Act, 1961, no liability uls.234 B arises, ignoring the fact: (i) that since the tax deducted at source was not adequate to meet the entire tax liability, it was obligation on the part of the assessee to make the deficit good by making the payments towards the advance tax. (ii) that since the assessee failed to pay the advance tax, the Assessing Officer was right in charging interest u/s.234 B and 234C of the Act." The Appellant prays that the order of Ld.CIT(A) on the above grounds be set aside and that of the A.O. restored. Appeal of the Assessee & Ground relating to TP of the Department being common ground: 2. Ld. A.R has placed before us a chart which was taken into consideration while deciding both these appeals. 3. According to the chart, Ground No.1 of the assessee's appeal is stated to be covered against the assessee by the decision of the Tribunal in assessee's own case by decision dated 31/10/2003 in ITA No.1230/Bom/1995 in the case of DCIT vs. Sakura Bank Limited (copy of the decision was placed at pages 1 to 6 of the paper book). It may be mentioned that assessee was formerly known as....
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....d concluded and the ITAT refused to amend its order on the basis of a retrospective amendment. In the case before us, the matter is not concluded but is pending before us by way of an appeal and we are called up to judge whether the rectification order passed by the learned Assessing Officer was correct in law. Insertion of Explanation to section 90 makes it clear that a higher rate of law for foreign companies is not to be regarded as violating non-discrimination clause. The learned AO's order rectifying the rate of tax would be a correct order in the light of the said Explanation. We cannot ignore the retrospective amendment and the ratio laid down by the Hon'ble Apex Court in CIT vs. J.K.Synthetics. As the controversy is covered by the retrospective amendment, the issue has to be decided in Revenue's favour. The order of the learned CIT(A) is accordingly reversed and that of the learned Assessing Officer is restored." 3.1 Ld. D.R pointed out that similar issue was decided by the Tribunal in the case of Chohung Bank vs. DDIT, 102 ITD 45, wherein it has been held that charging of the assessee as foreign banking company at higher rate applicable to non-domestic company was not h....
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....ayment of interest made by the PE, the question of disallowance of the said interest by invoking the provisions of section 40(a)(i) does not arise. Accordingly we answer question No.1 referred to this Special Bench in the negative i.e. in favour of the assessee and question No.2 in affirmative i.e. again in favour of the assessee." In view of the aforementioned decision of Special Bench in the case of the assessee itself, after hearing both the parties we allow ground No.2 filed by the assessee. 5. Apropos Ground No.3, the AO has discussed this issue in para 8 of the assessment order. The TPO under section 92CA(3) of the Income Tax Act, 1961 (the Act) had suggested adjustment of Rs. 6,85,779/- to the international transaction of the assessee which has been added by the AO. The Ld. CIT(A) has discussed this issue in para 5 of the impugned order. The aforementioned adjustment is made on the activity of the assessee for providing credit monitoring assistance for the overseas entities. It was submitted that in the year 2001, Hong Kong branch of the appellant had participated in various syndicated loans to the buyers across globe. Out of the said syndicated loans, two loans wer....
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....er, after having granted the loan monitoring is a minimal exercise consisted of only reviewing financial statement and watching reports in the newspapers and in view of such nature of work the salary allocation of Rs. 1,49,769/- and further allocation in indirect expenses of Rs. 4,73,668/- was quite high and he reduced the indirect cost for such activities to Rs. 2,50,000/- and adding an amount of Rs. 1,49,767/- towards salary cost the total disallowable item was computed at Rs. 3,99,767/-, to which 10% mark up was added and total amount chargeable for such services was computed at Rs. 4,39,743/- and balance addition of Rs. 2,46,035/- was deleted. The assessee is aggrieved with the sustained disallowance and revenue in its appeal vide Ground No.2 has agitated deletion made by ld. CIT(A). 5.1 The Ld. A.R arguing this ground in assessee's appeal submitted that Ld. CIT(A) after having recorded a finding that minimal exercise was required to do the activities which was required to be done has wrongly been sustained the addition to the extent of Rs. 4,39,743/-. He submitted that such addition should be reduced. 5.2 On the other hand, Ld. DR relied upon the assessment order and ple....