TaxTMI 
TaxTMI 
2025 (1) TMI 1604
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....(RBS NV) was amalgamated with NWM Plc ( the assessee) u/s 44A of the Banking Regulation Act, 1949 through the Reserve Bank of India (RBI) approved scheme of amalgamation. The effective date of amalgamation was 27.02.2017. As per the submission of the assessee in the computation of income it has deducted the interest on tax refund belonging to RBS NV amounting to Rs. 62,12,73,000/-from the gross total income. The said income has been assessed in the hands of the RBS NV as is apparent from the copy of acknowledgement of ITR return filed by the said entity, wherein it has shown income of Rs. 62,12,72,670/- and paid tax thereon at the rate of 10%. The said interest was taxed in accordance with the ld. Dispute Resolution Panel direction as contained in para 8.4 of the order which is extracted below:- "(i) It is observed that post amalgamation, income tax refund has been accounted for by the assessee company in its books of accounts. In this background the onus was on the assessee company to prove its case, which it has failed to discharge. The issue of double taxation is a real issue which requires to be addressed by claiming credit in hands of the right concern, which in this ....
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....e ld. AR vehemently submitted that having regard to the factual scenario as narrated hereinabove it is clear that no part of the interest granted under section 244A of the Act accrued to the assessee as the refund and interest was determined in the case of Netherlands Entity and not to the assessee. The ld. AR submitted that the assessee had taken over all assets and liabilities of the Indian branches that were in existence on 27.02.2017 and any amount which accrued thereafter to the Netherlands entity solely belonged to the Netherlands entity. The ld. AR submitted that the only reason why it was credited to the bank account and reflected in the books of account of the assessee was that because of Indian bank accounts of Netherlands entity that existed on 27.02.2017 vested in the assessee consequent to amalgamation and accordingly, as the said amount got credited to the profit and loss account. The ld. AR submitted that the said fact was neutralized by the assessee by reducing the same from the income of the assessee while filing the income tax return and copy of which is available in the paper book as stated here in above. The ld. AR placed reliance on the judgement of the Hon'....
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....ecial Bench of the Tribunal in CIT vs. Clough Engineering Limited 130 ITD 137 as well as the judgment of the Bombay High Court in DIT vs. Credit Agricole Indozuez 377 ITR 102. In both these decisions the Tribunal/Court has taken the view that the interest earned from the tax department has to be assessed in accordance with Article 11(2) of the relevant DTAA. 10. The ld. DR on the other hand relied heavily on the final assessment order by submitting that the income has been correctly assessed in the hands of the assessee on the basis of credit being given in the bank account of the assessee besides the income tax refund and corresponding entities being accounted in the books of accounts and also in the profit and loss account. The ld. DR submitted that when the interest has been credited in the bank account of the assessee it is obvious and apparent that same has to be assessed in the hands of the assessee and not in the hands of the Netherlands entity which owned and operated all the branches in India till 27.02.2017 when the Indian branches amalgamated with the assessee though the ld. DR could not duly explain that on the basis of the returns and computation filed a copie....
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....ect of Netherland entity in both the assessment years has become final. Now, mere fact that the refund as well as interest was credited in the bank account of the assessee post amalgamation would not decide the nature of the receipt in the hands of the assessee . In our opinion, it is a unequivocal and settled position that the same income cannot be taxed twice first in the hands of the same assessee and secondly hands of some different assessee. In the present case, the income has been assessed in the hand of Netherlands entity and therefore it is not open to the Revenue to assess the same income in the hands of two different persons. Therefore, for this reason also the addition has to be deleted. The ld. AR also placed reliance to corroborate his contention on the decision of R Dalmia (supra) and similarly, in in Sutlej Cotton Mills Ltd. Vs. CIT 116 ITR 1 (SC) and Tuticorin Alkali Chemicals and Fertilizers Limited Vs. CIT 93 Taxmann 502 (SC) Hon'ble Apex Court held that the entries in the books of accounts would not establish the taxability of the receipt. Considering the above fact, we are inclined to hold that the interest credited in the bank account of the assessee which ....
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....s and of Rs. 2,58,03,000/- in respect of payment of deferred award bonus u/s 43B of the Act on the payment basis. It was also stated that the aforesaid amount were disallowed by the bank in the earlier assessment years when the provisions were created and not paid and upon payment/ reversal of the said provisions, the bank has claimed deduction u/s 43B of the Act. 08. On 28th December, 2022, the assessee submitted before the ld. AO substantiating the payments based on the actuarial valuation report issued by third party evidencing the payment of Rs. 32,41,570/-. In the assessment order the ld. AO noted that the assessee has not submitted the details of payment of Rs. 32,41,570/- comprising payment of Rs. 10,84,000/- in respect of long service award and therefore, same was not allowed. Similarly, in Para no.5.9, the assessee has not submitted the bifurcation of payment of Rs. 2,91,51,550/-under the head benefits payment which according to the assessee included 2,58,03,000/- on account of bonus payment. After taking into account the aforesaid facts the tax audit report and actuarial valuation report issued by the third party as referred above, we note that these provisions were cr....