AI Drafter 
TaxTMI 
TaxTMI 
2018 (12) TMI 1564
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.... wherein vide the impugned order, the Ld. CIT (Appeals) has upheld the orders of the Assessing Officer passed u/s 201 of the Income Tax Act, 1961 (hereinafter called 'the Act') treating the assessee to be 'assessee in default' for withholding of taxes from the payments made to ABN Amro Bank, Stockholm Branch. Since the issue is common all the six appeals, the same were heard together and for the sake of convenience they are being disposed of together through this common order. 2.0 Brief facts of the case are that the assessee desired to purchase telecom equipments from a Swedish supplier M/s Ericsson which required substantial funding in foreign currency. The assessee sought foreign exchange credit facility to buy the telecom equ....
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.... 1,15,34,26,462 5,99,87,588 2.1 The assessee did not withhold tax at source on the payments made to the ABN Amro Bank under a belief that the same was not liable to tax in India having regard to the provisions of Article 11(3) of the India Sweden Double Taxation Avoidance Agreement. However, the Assessing Officer initiated proceedings u/s 201(1) of the Act for non-withholding of tax from the payments made to ABN Amro Bank. Although, the assessee submitted before the Assessing Officer that the Swedish Tax Authorities had issued Tax Residency Certificate certifying that ABN Amro Bank was a tax resident of Sweden in terms of Double Taxation Avoidane Agreement between India and Sweden and, therefore, the payments made to ABN Amro Ba....
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....AT Delhi Bench in assessee's own case for assessment year 2007-08 in ITA 5636/Del/2016 and as reported in 161 TTJ 2383 (Delhi Tribunal) and submitted that the quantum appeal of the assessee had been restored to the file of the Assessing Officer in assessment year 2007-08 wherein the assessee was challenging the disallowance of interest paid to ABN Amro Bank which had been disallowed u/s 40(a)(i). 3.1 On a specific query from the Bench, both the parties before us agreed that the impugned interest in the quantum interest pertained to the same parties and the same loan for which the assessee has been held to be in default u/s 201 of the Act and against which the assessee was now in appeal before us. Both the parties fairly agreed that inter....
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....n India. 26. We find that there is no dispute about the fact That the ABN-S, was arranger of the loan and there were also other financial institutions termed as 'original lenders' who had actually financed this transaction. The role of the ABN-S, except to the extent of financing of its own funds in this arrangement, was confined to that of a facilitator. We have also, noted that it is an undisputed position that .subsequently these loan agreements were novated and the original lenders came into direct agreements with the assessee. Under these, circumstances, in our considered view, the interest received by the-ABN-S, except to the extent received for the financing done by itself, was not entirely in his own right but merel....
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....aid by the assessee remitted to ABN-S. In our considered view, even though such interest is remitted to ABN-S. Since ABN-S has mainly acted as a conduit, it is to be treated as having been paid to the beneficial owners of such interest i.e. original lenders under the financing" arrangement - though through the ABN-S., The taxability of interest is to be examined in the light of factual findings to be so arrived at, and in the light of the applicable legal position as per the relevant provisions of the tax treaties that India has with the jurisdictions in which original lenders are resident in. Once again, we have to acknowledge the fact that learned counsel for the assessee has filed elaborate documentation in support of their stand about t....