TaxTMI 
TaxTMI 
2025 (4) TMI 601
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..... Assessee in its appeal raised the following grounds of appeal: - 1. "That on the facts and circumstances of the case and in law, the Assessing Officer ("AO") has erred in completing the assessment of the Appellant not in pursuance to the directions issued by the Dispute Resolution Panel ("DRP"), and without giving due consideration to the submission of the Appellant, thus, the final assessment order passed is bad in law and void ab initio. 2. That on the facts and circumstances of the case and in law, the DRP and AO has erred in holding that Appellant has a service permanent establishment ("PE") in India within the meaning of Article 5 of India UK double Taxation Avoidance Agreement ("DTAA"). 3. That on the fact....
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....s grossly erred in holding that royalty earned by the Appellant is effectively connected to alleged service PE of the Appellant in India and in holding so has failed to appreciate that: 5.1 Intangible property in respect of which royalty has been paid was wholly developed outside India; 5.2 No functions, assets, or risk associated with such intangible property are undertaken or present in India. 5.3 The Ld.AO erred in arbitrarily including the royalty received by the Appellant towards 'Backhoe-Loader P-106', 'Loadall model' and 'Model 4DX' under a different TTAs dated 21 October 2010, 22 October 2013 and 3 July 2015 respectively, totaling to Rs. 7,54,09,973/- as also effectively connected with the alleged Service ....
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.... the provisions of Article 13 of the DTAA would no longer apply and income is liable to be taxed as per Article 7 of the DTAA. 8. That on the facts and circumstances of the case and in law, the DRP has erred in not appreciating that the dividend distribution tax ("DDT") on the dividend income distributed by JCB India to the Appellant is a tax on recipient of Income and DDT rate ought to be restricted to the beneficial tax rate of 10% in accordance with Article 11 (Dividends) of the DTAA, instead of the tax rate of 20.35% charged in terms of section 115O of the Act and not allowing the consequential on account of refund of excess taxes. 9. That on the facts and circumstances of the case and in law, the DRP has erred in reje....
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....o such alleged Service PE has been resolved by settlement between the Competent Authorities of India and United Kingdom under Mutual Agreement Procedure ("MAP") as provided under Article 27 of Double Taxation Avoidance Agreement between India and United Kingdom (refer Annexure 1). Further, acceptance of MAP resolution by the Appellant has already been placed on record (refer Annexure 2). Accordingly, the Appellant requests for withdrawal of grounds of appeal no. 2 to 7 as the matter is now settled under MAP." 5. In view of the above submissions and since the Assessee had settled the disputes in ground nos. 2 to 7 of grounds of appeal under MAP these grounds of appeal are dismissed as withdrawn. 6. Ground no.9 is with regard to not ent....
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.... the Special Bench of Mumbai Tribunal, wherein it has been held that the DTAA does not get triggered when a domestic company pays Dividend Distribution Tax (DDT) u/s 115-O of the Act. The Special Bench further held as under: - "Conclusion: 83. For the reasons give above, we hold that where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income-tax (Tax on Distributed Profits) referred to in sec. 115-0 of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in section 115-0 of the Act and not at the rate of tax applicable to the non-resident shareholder(s) as specified in the relevant DTAA with reference....