TaxTMI 
TaxTMI 
2025 (9) TMI 435
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....ionnaire were duly issued and served upon the assessee. Thereafter, the assessment order was framed by the ld. AO vide order dated 12.04.2021, passed u/s 143(3) of the Act. The ld. PCIT upon perusal of the assessment records observed that in the computation of income the assessee net interest of Rs.9,60,95,000/- on income tax refund (income tax refund Rs.16,57,49,200/- - TDS deducted Rs.6,96,54,448/-) was claimed as deduction by the assessee on the ground that this was offered to tax in the income tax return of Royal bank of Scotland NV for A.Y. 2018-19. The ld. PCIT also noted that tax had been paid at special/ lower rate at 10% as per Double Taxation Avoidance Agreement (DTAA) in the return of Royal bank of Scotland NV against normal rate of 40% plus surcharge/ cess. Accordingly, the notice u/s 263 of the Act was issued on 04.03.2024 and finally, after taking the assessee's submission, the assessment was set aside with a direction to conduct proper enquiry and pass assessment order in accordance with the findings given in the revisionary order. 3.1. At the outset, the ld. Counsel for the assessee pointed out that the issue is squarely covered by the decision of the co-ordinate....
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....operative part of the order in assessee's own case for A.Y. 2020-21 in ITA No. 273/KOL/2023 as under:- "8. The ld. AO thereafter passed the final assessment order u/s 143(3) read with section 144C(13) of the Act dated 27.01.2023, wherein the ld. AO reiterated the finding given by him in the draft assessment order, save and except that he held that interest of Rs.6,18,50,000/- could not be added to the assessee's income u/s 68 of the Act but it should be added u/s 56 of the Act as income from other sources and thereafter, applied rate of 40% plus the educational cess and surcharge to bring the said amount under tax. Aggrieved assessee preferred the appeal before the Tribunal against he said final order. 9. The 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 ac....
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...., hence, the revenue should not be permitted to do so. Even if it is permitted to do so, then, this must be cast with an obligation to rectify the wrong and delete the income which already stands assessed. As the same has not been done it is submitted that the addition of the income in the hands of the appellant cannot be sustained. In the event the Tribunal is pleased to hold that the income has to be assessed in the hands of the Appellant, then, it is submitted that the same can only be assessed at the rate specified in article 12(3)(a) of the UK DTAA (i.e. 10%) and not by applying the rate of 40% as has been done by the Assessing Officer in the final assessment order. In this regard reliance is placed on the order of Special 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 t....
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.... relevant to A.Y. 2019-20 and copy of acknowledgement of ITR is available at page no.143, wherein interest of Rs.9,65,18,062/- offered to tax and in accordance with the Article 11(2) of the Double Taxation Aviance Agreement entering into between India and Netherland, tax liability was determined at Rs.96,51,807/-. Similarly in A.Y. 2020-21 refund was actually received byRBS. N.V. Netherla nds entity and interest thereon of Rs. 5,21,98,080/- was offered to tax and tax was determined in accordance with the above DTAA at Rs.52,91,808/- and the copy is available at page no.144 of the Paper Book, where it is noted that both the returns of income were processed u/s 143(1) of the Act and accordingly, the assessment in respect 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 ....