TaxTMI 
TaxTMI 
2025 (11) TMI 95
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....Act, 1961 ("the Act"), pursuant to the directions of the Hon'ble Dispute Resolution Panel (DRP) order dated 29.12.2024 for the Assessment Year 2018-19. 2. Ground nos. 1, 2 and 3 are not pressed and therefore, dismissed as not pressed. 3. Brief facts of the case: M/s AKA Ausfuhrkredit-Gesellschaft MBH, Germany (hereinafter referred as 'assessee) is a company registered in Germany having address as Grosse Gallusstrasse 1-7. Frankfurt (Main) DE 60311. 3.1 In this case, information was received by the AO from the ITO, TDS Ward- 1(3)(1), International Taxation, New Delhi that as per the 15CA data uploaded by M/s Filatex India Ltd., it was noticed that M/s Filatex India Ltd. had made foreign remittances toward Management Fee (Pro....
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.... year to enjoy the advantages of the Treaty for the Avoidance of Double Taxation from 19th December 1996 between the Republic of India and the Federal Republic of Germany You asked us to provide your esteemed authority with an assessment of income/loss for the Assessment Year 2016-17 in the prescribed form The bank has never been asked to deliver any information to the Indian Income Tax Department before if you could explain what information in which form we shall deliver, we will perhaps be able to do so. In general, the bank provides Indian companies with ECB loans to finance capital goods (for approximately 20 years) and the income consists of interests and provisions." 4. Further, the AO noted that during the assess....
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.... of the Paper Book, confirming the action of the AO is reproduced as under: "5.5 AO has also the differential nature of these income streams by examining the loan documents related to M/s Filatex India Ltd. and has given a finding that the assessee bank had issued three separate invoices regarding (i) documentation fee; (ii) management fee; and (iii) commitment fee. The AO has also acknowledged that Hon'ble ITAT Delhi In AY 2016-17, in assessee's own case had decided the issue in favour of the assessee. Similar decisions have been rendered by the higher judiciary in some other cases also. However, Department has not accepted these decisions and is contemplating further appeal where the tax-effect is above the prescribed mon....
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....aid provision, it is quite clear that the term "interest" includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilized. Thus, even the definition of interest in the domestic law, in our view, covers all kinds of payment attached to the loan. In the fact of the present appeal, the Assessing Officer, no doubt, has accepted the claim of the assessee that interest along with other fees, such as, commitment fee, documentation fee attached to the loan granted are exempt under Article 11(3)(b) of the Act. After carefully examining the facts on record, we are of the considered opinion that even the management fee is of similar nature as commitment fee an....
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.... that the amount of Rs. 87,34,375 /- is not taxable, as it does not qualify as FTS. Accordingly, the addition of Rs. 87,34,375/- made by the AO is deleted. Ground no. 3 of the appeal is allowed. 11. The balance grounds of appeal being ground nos. 4 to 7 are reproduced as under: 5. Ground No. 4: Levy of interest under section 234A of the Act: On the facts and in the circumstances of the case and in law, the Ld. AO erred in computing and levying interest under section 234A of INR 3,95.824 of the Act. 6. Ground No. 5: Levy of interest under section 234B of the Act: On the facts and in the circumstances of the case and in law, the Ld. AO erred in computing and levying interest under section 234B of INR 7.3....