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2016 (12) TMI 1136 - ITAT MUMBAITaxability of borrowed / loan services charges received - Indo-Singapore DTAA - AO treated it as Fees for Technical Services / Fees for Included Services (FTS / FIS) under Article 12 of the treaty - held that:- On hearing both the parties, we have perused paras 5, 6 and 7 of the order of the assessment, which are extracted above, and find that it is obvious that the Assessing Officer relied heavily on the assessment order for the AY 2007-2008 and found the issue is one and the same ie ‘if the borrowed service charges constitutes FTS under Article 12 of the Indo-Singapore DTAA. Since, the language of Article 12 is common for Indo-US and Indo-Singapore DTAA, the order of the Tribunal is equally relevant for all the US based companies as well. 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Tribunal in favour of the assessee and further the department has resolved that the issue under MAP and consequently withdrawn the appeals filed before the Hon’ble High Court.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 the above facts and circumstances, when the issues involved in these appeals have already resolved under the Mutual Agreement Procedure, we direct the AO to grant the relief accordingly to the assessee after verification of fact that the issues have already been resolved under the Mutual Agreement Procedure. - Decided in favour of assessee
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