TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 1510
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....luding the borrowed services fees received by the assessee does not constitute fee for technical services in the hands of the assessee and the same falls within the ambit of business profit under Article 7 of the India-Singapore Double Taxation Avoidance Agreement. 3. We have heard representatives of both the sides, records perused and the judicial decisions duly considered. 4. Briefly stated the facts of the case are that the assessee is a foreign company, incorporated in Singapore. The assessee has entered into international transactions with its Associated Enterprises (AEs), McKinsey & Co., Inc. (Indian Branch) during the financial year under consideration. Transfer Pricing Study report in Form 3CEB was filed. The assessee is part of M....
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....ter before the CIT(A). It was brought to the notice of the CIT(A) that the Tribunal in assessee's own case has taken up consistent view for various assessment years that the income from borrowed services is not taxable under the India-Singapore Treaty. The assessee submitted the orders of the Tribunal from AYs 1999-2000 to 2011-2012. It was also brought to the notice of the CIT(A) that against the order of the Tribunal for AYs 2006-2007, 2007-2008 and 2008-2009 to 2010-2011, the Revenue had preferred appeals before the Hon'ble High Court of Bombay, but subsequently the appeals were withdrawn due to low tax effect. It was further brought to the notice of the CIT(A) that in the case of group companies for AYs 2006-2007, 2011-2012 and 2012....
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.... issue under consideration. Further, Ld Counsel for the assessee submitted that assessment for the AY 2007-08 was a subject matter of litigation before the Tribunal and the Tribunal passed the order in favour of the assessee holding that the said loan service charges earned by the assessee do not amount to FTS. Therefore, as per the Ld AR, the addition has to be deleted for all these ten AYs. He further mentioned that the issue in all these ten appeals is common and the same stands covered in favour of the assessee by the order of the Tribunal in the assessee's own case not only for the AY 2007-08 but also rest of the AYs as well ie AYs 2008-09 to 2011-12. In support of the same, Ld Counsel for the assessee brought our attention to page....
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....er book, Ld Counsel for the assessee submitted that the resolution under MAP was duly accepted by the Department. In such case, the DRP / AO cannot take a different view in the matter. Further, referring to para 3.3 on page 85 of the paper book (a copy of the MAP proceedings vide File No.480/02/2008-FTD.I), Ld Counsel for the assessee mentioned that the 'borrowed service charges shall not be taxable in India as 'royalty' or 'FIS'.' Relevant lines from the said para 3.3 read as under:- "3.3. The amount paid by McKinsey India to Mckinsey & Co., Inc. Or any other McKinsey entity incorporated in the US on account of...........borrowed service charges.......shall not be taxable in India as royalty or fees for included ....
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.... charges constitutes FTS under Article 12 of the Indo-Singapor DAA. Since, the language of Article 12 is common for Indo-US and Indo-Singapor DTAA, the order of the Tribunal is equally relevant for all the US based companies as well. 3. We have heard Shri Poras Kaka Id. Senior Counsel of the assessee as well as Id. DR and considered the relevant mater on record. The Id. Senior Counsel has pointed out that the issue involved in this appeal has already been considered and decided by this Tribunal in the number of decisions in the cases of group concerns of the assessee. He has referred the following decisions. > P.T.McKinsey Indonesia v/s DDIT(IT), (ITA No.7625/M/ 2010) > DDIT(IT) v/s McKinsey Incorporated & Ors. (ITA NO.2289/M/ 2009....
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....ls have been settled under MAP requires verification. 5. We have heard the rival submissions and considered the relevant material on record, we noted that these issues have already been decided by this Tribunal in the various decisions as mentioned above in the group concerns of the assessee before us. Against the decision of the Tribunal, the revenue filed the appeals before the 6. Thus, it is clear that the issue involved regarding borrowed service charges was decided by this Tribunal in favour of the assessee and further the department has resolved that the issue under MAP and consequently withdrawn the appeals filed before the Hon'ble High Court. Further, the assessee has filed a letter dated 12/02/2014 thereby stated that the ....