AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 1249
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....Banking Transactions a. The learned Deputy Director of Income-tax (the Assessing Officer) erred in holding that a sum of US $ 40,52,719/- (Rs. 17,49,55,879/-) received towards undertaking investment banking transactions ("IBK Transactions") and towards reimbursement of expenses are liable to tax in India as "fees for technical services" under section 9(1)(vii) read with section 115A(b) of the Income Tax Act, 1961 (the Act) and under Article 13 of the Double Taxation Avoidance Agreement between India & UK @20.91% (inclusive of surcharge @2.5% and education cess @ 2%). b. The Assessing Officer further erred in holding that the services rendered by the assessee were in the nature of "Fees for Technical Services" under Article....
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.... under section 234D of the Act amounting to Rs.4,34,723/-. 6. The Assessing Officer erred in making an addition to the tax demand of Rs.1,09,93,841/- on the ground that Refund Order was already issued to the assessee on 25th March, 2009. The assessee submits that while it received a notice of demand under section 156 of the Act determining a tax refund of Rs. 1,09,93,841/-, it did not receive the actual Refund Order. 7. The appellant submits that the Assessing Officer be directed: (a) To treat the receipts from IBK transactions and reimbursement of expenses from Indian companies amounting to US$ 40,52,719/- as not liable to tax in India and delete the addition of Rs. 17,49,55,879/-. (b) Without prejudice ....
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....005-06. "This appeal filed by the Revenue is directed against the order of CIT(A)- XXXII, Mumbai, passed on 25/02/2009 for the assessment year 2005-06 wherein the revenue has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that neither the under writing commission nor the selling commission, received from the Indian Companies would amount to 'Fees for Technical Services' within the meaning of the DTAA between India and U.K." 2. The appellant prays that the order of the Ld. CIT(A), Mumbai on the above grounds be set aside and the order of the AO be restored." 2. Briefly stated the facts of the case are that the assess....
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....rticle 7 of the DTAA dealing with business profits, business profits of a resident of the UK are liable to tax in India only if such profits are attributable to a permanent establishment of the UK resident situated in India as defined in Article 5 of the DTAA. The assessee's income from investment banking transactions is not attributable to a permanent establishment of the assessee situated in India and, accordingly the aforesaid income is not liable to tax in India. The assessee relied upon various case laws before the CIT(A) including the decision of ITAT, Mumbai in the case of Raymond Ltd. V. DCIT (2003) 80 TTJ 120 (Mum.). After considering the submissions of the assessee, the CIT(A) held as under: "5.12...................... I ....
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.... of the authorities below. We find that the issue under consideration is squarely covered by the decision of ITAT Mumbai Benches in the case of Raymond Ltd. V. DCIT (supra), wherein it was held that "neither management commission, nor underwriting commission nor even selling commission/concession would amount to fees for technical services within meaning of DTA with UK and, consequently, there was no obligation on part of assessee-company to deduct tax under section 195." The CIT(A) following the said decision held that the fee received by the assessee is not liable to tax in India as the same does not constitute fees for technical services under the India-UK DTAA read with the Memorandum of Understanding forming part of the India- USA DTAA....
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....infructuous is dismissed. 4. Apropos Ground No.3, it was the submission of the Ld. AR that tax rate of 41.82% have been levied on interest income on the basis that assessee is assessable under the domestic provisions. He submitted that in Ground No. 1, the assessee has been assessed under the provisions of DTAA, therefore, interest income will be taxable only as per provisions of DTAA. Therefore, it was pleaded that rate of tax leviable upon interest should be directed to be taken as the rate described in the provisions of DTAA. However, Ld. DR relied upon the assessment order. 4.1 After hearing both the parties and after carefully considering their submissions, as Ground No.1 is decided in favour of the assessee we hold that as the a....