TaxTMI 
TaxTMI 
2024 (6) TMI 1510
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....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 McKinsey group of entities, the primary business of which is to render strategic consultancy services to their clients, which inter alia includes the analysis of performance, developments, strengths, and weaknesses of their clients, improving their profitability and productivity, and similar other parameters. All these services have been performed outside India and since they have been rendered in the ordinary course of business, the receipts on account of the same amounting to Rs.6,79,39,779 qualified to be a business receipt of the assessee. Since the assessee-company has no PE in India, the incidence of tax does not arise in India. During the course of scrutiny assessment proceedings, the assessee was asked to explain as to why the borrowed services income of Rs.6,79,39,779 should not be treated as fees for technical services. In its repl....
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....elevant finding of the co-ordinate Bench reads as under:- "Before us, Shri Porus Kaka and Mr. Divesh Chawla, Id Counsel for the assessee brought our attention to the above said order assessment order for the AY 2010-11 and submited that the Assessing Officer proceeded to make above addition in all the cases under consideration substantially relying on his order for the AY 2007-2008. Assessing Officer did not recognise the binding nature of the Mutual Agreement Procedure (MAP) order relevant to the 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 sa....
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.... and 2009-10 where such service charges were held conclusively not taxable in India. He further mentioned that if the facts are common, the above said conclusions are equally applicable to the appeals under consideration for the AY 2010-2011 too. Ld Counsel for the assessee also submitted that the proceedings pending before the Hon'ble jurisdictional High Court on this issue were also withdrawn by virtue of the judgment dated 23.1.2013, a copy of which is placed at pages 94 & 95 of the paper book. In essence, Ld Counsel for the assessee submitted that the issue under consideration stands covered in favour of the assessee considering the discussion given in paras 3 to 7 of the said order of the Tribunal (supra) for the AY 2007-2008, wherein one of us (AM) is a party to the said order. 5. Per contra, Ld DR for the Revenue submitted that MAP is year specific and therefore, the issue under consideration cannot be decided relying on the Tribunal's order for the AY 2007-2008. 6. We have heard both the parties and perused the order of the DRP / AO well as the relevant material placed before us. On hearing both the parties, we ha perused paras 5, 6 and 7 of the or....
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....ly. On the other hand, the Id. DR though has not disputed the withdrawn of the appeals however submitted that whether these issues in these appeals 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 issue relating to taxability of firm function charges does not arise in case of these three appeals and the only issue involved in these appeals is the taxability of borrowed service charges, which has been decided in favour of the assessee under the Mutual Agreement Procedure. In view of th....
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....of the Director-General of Income Tax international Taxation, Fourth Floor, Drum Shape Building I.P. Fatate, New Delhi, 110002 1h. 23378381 7.do, DoIT/ mnd. Taxation /Judicial/2012-13/1804 Dated: 22.10.2012 The Director of Income Tax (international Taxation)-D. Mumbai, Ser/stalam. Subject Order ne Competent Atithority ed Indik under Mutual Agreemens Procedure of India - USA OTAC in the case of M/s Mckinsey & Co .. USA and Steltinsey's Indian Branch - Withdrawal of appeals . Regarding. Reference: DIT(IT-N/Jed:/MAP/ 12-13 dated 09,07.2012 Kindly refer to ilie above. In this regard. I am directed to inform you that the Director General of Faceme Tax (Internacional Taxation) has accorded approval for withdrawal of appeals from the High court only in the cases/issues which have duly been resolved under MAP and given affect to by the AO and in respect of which the assesses has confinmed its accepttuice of the decision of MAP in writing to the Department Yours faithfully. Sulm 1421 Shashi Saldanit Dyr Director of Income Tược, [ça | | Judicial], New Delhi. 25-10-2012 93 9 HTW ( 226 35418 Phone Tulex - Fax : 226 35408 à¤à¤¾à¤....