Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 450 - AT - Income TaxRate at which tax is leviable - AO's action of taxing the Appellant at the rate normally applicable to non-resident companies - Held that:- As assessee’s appeal is stated to be covered against the assessee by the decision of the Tribunal in assessee’s own case as charging of the assessee as foreign banking company at higher rate applicable to non-domestic company was not hit by non-discrimination clause of Article-25 of DTAA - Insertion of Explanation to section 90 makes it clear that a higher rate of law for foreign companies is not to be regarded as violating non-discrimination clause - against assessee. Disallowance of interest payable on inter office accounts - non deduction of tax at sources - Held that:- The interest paid to the head office of the assessee bank by its Indian branch cannot be taxed in India in the hands of assessee bank, a foreign enterprise being payment to self which cannot give rise to income that is taxable in India as per the domestic law - as interest paid by the Indian branch is not chargeable to tax in India, it follows that the provisions of section 195 would not be attracted and there being no failure to deduct tax at source from the said payment of interest made by the PE - in favour of assessee. TP Adjustments - Held that:- Considering the assessee submission that direct salary cost should be considered and indirect overhead cost should not be considered as concerned employees performed insignificant role for the credit monitoring assistance done for the overseas associate enterprises. However no fresh ECB loans have been granted during the year under consideration but services indeed have been rendered by the assessee to its overseas entities. The cost of the two employees for this has been evaluated at ₹ 1,49,767/-, which is even admitted by the assessee. The question remains only for the allocation of indirect expenses which have been estimated by CIT(A) at ₹ 2,50,000/- and on the aggregate of salary and indirect expenses 10% mark up has been applied - partly in favour of assessee. Liability u/s.234b & 234C - Held that:- CIT(A) has deleted the interest levied on the assessee under section 234B & 234C on the ground as that the entire income of the assessee was subject to deduction of tax at source under section 195 therefore, there was no liability to pay advance tax under section 208/209 (1)(d) - in favour of assessee.
|