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2014 (7) TMI 1305 - AT - Income TaxNot accepting the claim that the rate of tax applicable to domestic companies and/or co-operative banks also applicable to the Appellant, in accordance with the provisions of Article 26 (Non-discrimination) of the double taxation avoidance agreement between India and the Republic of France ('India - France tax treaty' - HELD THAT:- Issue is covered, against the assessee, by a series of orders passed by the various co-ordinate benches in assessee’s own case as also in the cases of Chohung Bank vs. DDIT [2005 (11) TMI 372 - ITAT MUMBAI] and JCIT vs. Sakura Bank Limited [2005 (12) TMI 465 - ITAT MUMBAI] .In this view of this undisputed position and the conclusions arrived at by the learned CIT(A) being in harmony with the views of the co-ordinate benches, we reject the grievance of the assessee. No interference is thus called for. Taxing the interest paid by the Indian branch of the assessee to its head office and overseas branches applying the provisions of Article 12 (Interest of India France Tax Treaty) - HELD THAT:- Since the issue under consideration is covered not only by the order of the Tribunal in assessee’s own case for the AY 2001-02 to 2003-04 but also by the order of the ITAT’s Special Bench in the case of Sumitomo Mitsui Banking Corporation [2012 (4) TMI 80 - ITAT MUMBAI] we hold that the department was not justified in subjecting to tax the interest paid by the Indian Branch of the assessee to its head office and overseas branches applying the provisions of Article 12 of India-France Tax Treaty. Income accrued in India - data processing fees paid by the India branch office of the appellant to its Singapore bench, as income of the appellant under article 13 (royalties and fees for technical services) of the India France DTAA” - whether an internal charge on the PE can result in income in the hands of the GE or an intra GE unit? - HELD THAT:- This issue is also covered by the order of the Tribunal in assessee’s own case for AY 2001-02 to 2003-04 wherein interest paid by assessee to Head Office/overseas branches was held to be not liable to tax Non granting credit for tax deducted at source on interest on sub-ordinated debt, paid by Indian branches of the assessee to its head office - HELD THAT:- Interest was allowed as tax has been deducted on payment of interest to the overseas/head office. AO held that computation of profit of PE is to be done as per Article 7(3)(a) of the DTAA. As per the AO, the income of overseas/head office, would be taxable under Article 12 of the Treaty. Accordingly, he added an amount of ₹ 3,09,48,018/- to the total income of the assessee as interest income of the overseas branches/head office. The AO held that assessee will be allowed credit of tax deducted on payment to head office/overseas branches. However, in spite of such observation, no credit for TDS was allowed. In the interest of justice, we restore this issue to the file of the AO with a direction to verify the tax deducted at source and to give respective credit after allowing proper opportunity to the assessee.
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