TaxTMI 
TaxTMI 
2017 (1) TMI 1819
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....ing to Rs.30,11,660/-, was liable to tax in India and further holding that the income on account of providing corporate guarantee was taxable in India under Article-23 of the Double Taxation Avoidance Agreement (hereinafter DTAA) between India and France. 2. During hearing, the ld. counsel for the assessee, Shri M.M. Golvala, along with Shri Raunak Vardhan, at the outset, claimed that the impugned issue is covered in favour of the assessee by the decision of the Tribunal in the case of assessee itself for Assessment Year 2009-10 (ITA No.7198/Mum/2012), order dated 28/03/2016. It was explained that the guarantee commission did not accrue or arose in India under the Income Tax Act, 1961 (hereinafter the Act). It was contended that the inco....
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....8/2015, before the ld. Assessing Officer, the claim of the assessee was that the guarantee commission as not liable to tax in India for the following three reasons:- i. There was no accrual of income in India either u/s 5 or U/S 9, as it was a case of one French company giving a guarantee to another French company, in France. The commission was received for giving the said guarantee. The entire operation of giving the said guarantee had been carried out in France, and no operation of activity was carried out in India. Under the provisions of Section 90(2) of the Income-tax Act, the assessee could choose to apply the provisions of the Income-tax Act, to the extent to which they were beneficial to it, and, therefore, there was no nec....
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....ever, the ld. Assessing Officer, considering the explanation of the assessee was of the view that the amount of Rs.30,11,660/- was nothing but "other income", therefore, taxable under Article 23 of the India-France DTAA. 2.3. On appeal, before the ld. DRP following the directions contained in Assessment Year 2012-13 held that the income is taxable in India and the reasoning contained in the order for Assessment Year 2012-13 still not overruled by the Tribunal, meaning thereby, followed its own order for Assessment Year 2012-13. The aggrieved assessee is in further appeal before this Tribunal. 2.4. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, mate....
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.... its associate concerns in India, viz., Capgemini India Pvt. Ltd and Capgemini Business Services India Pvt. Ltd. In the return of income filed by the assessee for the assessment year under consideration it declared an income of Rs.9,52,52,240/- on account of such royalty income. In the course of assessment proceedings, the Assessing Officer noticed that assessee had received guarantee commission of Rs.33,40,347/- from the two associate Indian concerns in return for assessee having extended corporate guarantee to BNP Paribas, France for the credit facilities extended by BNP Paribas, France to the associate concerns in India. Before the Assessing Officer the plea of the assessee was that such guarantee commission was not chargeable to tax in ....
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....ely, were secured by the said corporate guarantee given by the assessee. The assessee has charged guarantee commission @ 0.5% per annum for the corporate guarantees given on behalf of its subsidiaries in India. The AO has taxed the same by holding it to be "Other Income" under Article 23 of the DTAA between India and France. 4. The assessee is before us against the said addition. 5. We have considered rival contentions and found that the AO taxed the guarantee commission on the plea that guarantee has been provided for the purpose of raising finance by an India company. As per the AO finance was raised in India. The AO further observed that finance requirement is met by a Indian branch of the bank, the benefits of guarante....