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2016 (3) TMI 1096 - ITAT MUMBAI

2016 (3) TMI 1096 - ITAT MUMBAI - TMI - Income accrue or deemed to be accrued in India - Taxing corporate guarantee commission under Article 23 of DTAA between India and France - Held that:- From the record we found that guarantee commission received by France company did not accrue in India nor it can be deemed to be accrued in India, therefore, not taxable in India under Income Tax Act. Furthermore, as per Article 23.3, income can be taxed in India, only if it arises in India. In the instant c .....

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ee by : Shri M.M.Golvala & Khurshed Bulsara Revenue by : Shri Jasbir Chauhan O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the direction of DRP-I, Mumbai, dated 5-9-2012, for the assessment year 2009-2010, in the matter of order passed u/s.144C(5) of the Act. 2. In this appeal the assessee is aggrieved for taxing corporate guarantee commission amounting to ₹ 42,31,646/- under Article 23 of DTAA between India and France. 3. Rival contentions have been h .....

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NP Paribas, which credit facilities to the extent of USD 15 million4and 2 million respectively, were secured by the said corporate guarantee given by the assessee. The assessee has charged guarantee commission @ 0.5% per annum for the corporate guarantees given on behalf of its subsidiaries in India. The AO has taxed the same by holding it to be "Other Income" under Article 23 of the DTAA between India and France. 4. The assessee is before us against the said addition. 5. We have consi .....

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