TaxTMI 
TaxTMI 
2021 (1) TMI 1296
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....unds: 1. The learned AO has erred in not accepting the claim that the rate of tax applicable to domestic companies and/ or co-operative banks for AY 2014-15 is also applicable to the Appellant, in accordance with the provisions of Article 26 (Non-discrimination) of the India-France tax treaty. 2. The learned AO has erred in subjecting to tax, the data processing fees paid by Indian branch offices of the Appellant to its Singapore branch, as income of the Appellant to the tune of Rs.40,78,10,733. 3. Without prejudice to Ground 2 above, the learned AO has erred in levying surcharge of 5 percent and education cess of 3 percent on the tax computed under Article 13 of the India-France tax treaty. 4. The learned AO has erred in proposing to hold that interest payable/ paid by the Indian branch offices of the Appellant to the head office and its other overseas branches amounting to Rs 8,22,02,991 as chargeable to tax. 5. Without prejudice to Ground 4 above, the learned AO has erred in levying surcharge of 5 percent education cess of 3 percent on the tax computed under Article 12 of the India-France tax treaty. 6. The learned AO has erred in granting short credit of taxes deduc....
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....the Dispute Resolution Panel-1 (WZ), Mumbai (for short „DRP‟). The DRP after deliberating on the contentions advanced by the assessee therein passed its order on 04.09.2018. The A.O after receiving the order passed by the DRP under Sec. 144C(5), dated 04.09.2018 framed the assessment vide his order passed under Sec.143(3) r.w.s 144C(13) of the Act, dated 30.10.2017 and assessed the income of the assessee company at an amount of Rs.446,33,19,200/-. 6. Aggrieved, the assessee has assailed the assessment framed by the A.O under Sec. 143(3) r.w.s 144C(13), dated 30.10.2017 in appeal before us. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements that have been pressed into service by them to drive home their contentions in context of the aforesaid respective issues raised before us. As multiple issues are involved in the present appeal, we, therefore, shall take them up in a chronological manner, as under: 7. 1st Ground of appeal: "‟1. The learned AO has erred in not accepting the claim that the rate of tax applicable to domestic ....
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....this issue has already been examined by the Tribunal in the case of M/s BNP Paribas, decided in ITA Nos. 4601 & 4602/M/ 2004,vide order dated 1-7-2013. In that case also the tax rate applied in the case of the assessee, a foreign company was 48% compared to 38% applied in case of domestic companies. The assessee had argued that it was discriminatory and not in accordance with law. Reference was made to non-discrimination clause in the Treaty, as per which there should not be any discrimination between the domestic and the non-resident company. The Tribunal, however, referred to the Explanation in the Section 90, inserted in the IT Act with retrospective effect from 01-04- 1962 as per which the higher tax rate in case of foreign company, should not be regarded as violation of non-discrimination clause. The Tribunal also referred to the judgment of the Hon‟ble Supreme Court in the case of ACIT Vs. J.K. Synthetics. The Tribunal accordingly, rejected the ground raised by the assessee. The facts in the present appeal are identical and, therefore, respectfully following the decision of the Tribunal in the case of M/s BNP Paribas(supra), we dismiss this ground raised by the assessee....
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.... assessee amounting to Rs.132,335,594/- applying the provisions of Article 13(Royalties, fees for technical services and payments for use of equipment) of the India-France Tax Treaty. This issue is also covered by the order of the Tribunal in assessee‟s own case for AY 2001-02 to 2003-04 wherein interest paid by assessee to Head Office/overseas branches was held to be not liable to tax, following was the precise observation of the Tribunal in its order dated 20-6-2012 for AY 2002- 03:- 3. The solitary issue involved in the appeal of the assessee for, the A.Y. 2002-03 relates to the addition of Rs.1,48,30,613/- made by the A.O. and confirmed by the Ld. CIT (A) on account of "interest" paid by the Indian Branches of the assessee bank to its head office and other overseas branches. 4. The assessee, in the present case is a commercial bank having its Head Office in France. It carries on the normal banking activities Including financing of foreign trade and foreign exchange transactions in India through its eight branches situated at Mumbai, New Delhi, Kolkata, Bangalore, Pune, Ahmedabad, Chennai and Hyderabad. During the previous year relevant to A.Y. 2002-03, the Indian Bran....
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....;. Respectfully following the said decision of Special Bench of the ITAT which is directly applicable in the present case, we delete the addition of Rs.1,48,30,613/- made by the A.O. and confirmed by the Ld. CIT (A) on this issue and allow the appeal of the assessee. 5.1 The issue has also been dealt by the Special Bench of the Tribunal in the case of Sumitomo Mitsui Banking Corporation (supra),wherein the observation of the Bench at para 88 is as under :- "88. Keeping in view all the facts of the case and the legal position emanating from the interpretation of the relevant provisions of domestic law as well as that of the treaty as discussed above, we are of the view that although interest paid to the head office of the assessee bank by its Indian branch which constitutes its PE in India is not deductible as expenditure under the domestic law being payment to self, the same is deductible while determining the profit attributable to, the PE which is taxable in India as per the provisions of art. 7(2) and 7(3) of the Indo-Japanese Treaty read with, para 8 of the Protocol which are more beneficial to the assessee. The said interest, however, cannot be taxed in India in the hands ....
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....e, our reasons are different, as set out earlier in this order, but that does not really matter as of now. We fully agree with the conclusions arrived at by the coordinate bench. We, therefore, direct the Assessing Officer to delete the impugned disallowance of Rs 13,10,97,790. The assessee gets the relief accordingly. 14. Ground no. 2 is thus allowed." 6. We see no reasons to take any other view of the matter than the view so taken in assessee‟s own case in assessment year 2008-09. Respectfully following the same, we direct the Assessing Officer to delete the impugned disallowance of Rs.18,53,83,446/-.The assessee gets the relief accordingly." Also, the above order has been followed by ITAT „L‟ Bench, Mumbai in assessee‟s own case in A.Y.2010-11 (ITA No. 1182/Mum/2015). Further, the Hon‟ble Bombay High Court has not admitted the Department‟s appeal on this ground for AYs 2006-07 and 2007-08. Facts being identical, we follow the above orders of the Co-ordinate Bench and allow the 2nd ground of appeal." As the facts in context of the aforesaid issue under consideration remains the same as was there before the Tribunal in the assessee̶....
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....by the Indian branch offices of the assessee to its head office and its other overseas branches would be chargeable to tax had been looked into by the various benches of the Tribunal in the assessee‟s own case for the aforementioned years. On a perusal of the order passed by the Tribunal in the assessee‟s own case for A.Y. 2012-13 in ITA No. 1232/Mum/2018, dated 17.07.2019, the Tribunal following the order of the „Special bench‟ of the ITAT, Mumbai in the case of Sumitomo Mitsui Banking Corporation Vs. DDIT (2012) 163 ITD 66 (Mum) (SB) and the orders of the coordinate benches of the Tribunal in the assessee‟s own case for the preceding years, had concluded, that the interest income received by the assessee from its Indian branch being a payment made to self was thus not taxable in the hands of the assessee. For a fair appreciation of the aforesaid observation of the Tribunal we herein reproduce the same, as under: "21. We have considered rival submissions and perused the material on record. We have also applied our mind to the decisions relied upon. Undisputedly, the issue relating to the taxability of interest paid by the Indian Branch to the Head O....
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....xplanation will apply from the assessment year 2016-17 onwards. That being the case, as per the relevant statutory provisions applicable to the impugned assessment year and as per the ratio laid down by the Tribunal, Special Bench in case of Sumitomo Mitsui Banking Corporation (supra), which is applicable to the impugned assessment year, the interest income received by the assessee from its Indian Branch being a payment made to self, is not taxable at the hands of the assessee. Therefore, respectfully following the Special Bench decision of the Tribunal, Mumbai Bench, in Sumitomo Mitsui Banking Corporation (supra) and the decisions of the Co-ordinate Bench in assessee‟s own case in the preceding assessment years, which we are bound to follow adhering to the norms of judicial discipline in the absence of any material difference in facts, we have no hesitation in upholding the decision of the learned Commissioner (Appeals) on the issue. Grounds are dismissed." As the facts involved in context of the aforesaid issue for the year under consideration remains the same as was there before the Tribunal in the assessee‟s own case for A.Y. 2012-13, we, therefore, finding no reas....
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....the claim of the assessee is found to be in order then credit for the deficit amount of tax deducted at source shall be allowed by the A.O as per the extant law. Needless to say, the A.O shall in the course of the "set aside" proceedings afford an opportunity of being heard to the assessee who shall remain at a liberty substantiate his aforesaid claim. The Ground of appeal No. 6 is allowed for statistical purposes. 24. 7th Ground of appeal: "7. The learned AO has erred in levying interest under section 234A of the Act of Rs 29,58,846 without having regard to the fact that the return of income was filed by the Appellant within the prescribed due date for filing the return of income." 25. The assessee has assailed the interest of Rs.29,58,846/- that has been levied by the A.O under Sec. 234A of the Act. It was averred by the ld. A.R that as the return of income was filed by the assessee within the „due date‟ prescribed for filing of the same, therefore, the lower authorities were in error in saddling the assessee with interest under the aforesaid statutory provision. 26. We have perused the records and find that the assessee had admittedly e-filed its return of inco....