2018 (12) TMI 1511

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....the Act") pursuant to the directions dated 30.7.2015 given by the learned Dispute Resolution Panel-2, New Delhi. 2. Brief facts of the case are that the assessee is a company incorporated under the laws of United Kingdom and is one of the group companies of "Rolls Royce Group". The principle activities of the assessee are relating to erection, commissioning, supervision, installation and operations and maintenance of huge power plants and other projects. The style of functioning of the assesssee is typical as it negotiates an agreement and thereafter to execute the same sets project offices. 3. The operations of the assessee in India were carried out through various project offices in India which constitute its PE in India under Artic....

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....nd UK. 5. When the assessee filed objections before the learned DRP, Ld. DRP by order dated 30.7.2005 accepted the contention of the assessee in respect of the non taxability of interest income of Rs. 10,85,072/- from UK Bank accounts and Rs. 2,88,64,638/- on account of exchange gain arising on the reinstatement of bank balance outside India. However, learned DRP refused to accept the contention of the assessee that the interest is liable to tax at 15% as prescribed under Article 12(6) of the DTAA. According to the learned DRP, the provisions under Article 12(6) of the DTAA shall apply because the assessee undisputedly had a PE in India and debt claim, which is tax refundable, is effectively connected with PE in India. Learned DRP, there....

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....terest earned on income-tax refund has to be taxed as income from other sources as per Article 12(2) of DTAA between India and UK at 15% on gross basis. Learned AR, therefore, submits that the said view may kindly be confirmed in this appeal also. 8. Learned DR placed reliance on the orders of the authorities below. 9. We have gone through the record. The findings of the coordinate bench of this Tribunal in ITA No.801/Del/2014 and the assessment order u/s 143(3)/254 dated 13.9.2018 pursuant to the remand are not in dispute. A careful perusal of the order of the Tribunal and the order giving effect to the directions of the ITAT amply makes it clear that the decision of a coordinate bench of this Tribunal in the case of ACIT, Dehradun v....