9911796707
TMI Blog2016 (12) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... ten appeals, nine appeals attract Indo-US DTAA and the other appeal ITA No.1579/M/2014, wherein assessee is a Singapore based company, attracts Indo-Singapore DTAA. The interpretation of the treaties which is worded commonly is the subject matter of these appeals. The taxability of borrowed / loan services charges received by the assessee is the issue and if the same was rightly considered by AO as Fees for Technical Services / Fees for Included Services (FTS / FIS) under Article 12 of the treaty. Assessee did not consider the same as FTS / FIS / royalty. The Assessing Officer, after due process of making of the draft assessment order and the DRP / CIT orders, made assessments on the common date of 30.12.2013 treating the same as FTS and made respective additions of such charges in all the ten assessees under consideration for AY 2010-2011. Paras 5, 6 and 7 of the assessment order 2010-2011 are relevant in this regard and they taken as standard for want of facts which read as under:- "5. Assessee was asked to explain as to why the loan service income of Rs. 4,47,75,245/- should not be treated as fees for technical services, as discussed in detail in the assessment order for AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cifically provided in the DTAA and also in view of the fact that the assesses failed to provide such a basis for estimation of the net profit, the net profit estimated in such a manner that there is parity in the rats as prescribed in the DTAA and as compared under the Income Tax Act. In view of the above, it is estimated that the net profit of the assessee on account of the receipts, the nature being irrelevant is at 35.52% so that the net rate of tax applicable is 15% on the entire income earned." 3. Before us, Shri Porus Kaka and Mr. Divesh Chawla, ld Counsel for the assessee brought our attention to the above said order assessment order for the AY 2010-11 and submitted that the Assessing Officer proceeded to make above addition in all the cases under consideration substantially relying on his order for the AY 2007-2008. Assessing Officer did not recognise the binding nature of the Mutual Agreement Procedure (MAP) order relevant to the issue under consideration. Further, Ld Counsel for the assessee submitted that assessment for the AY 2007-08 was a subject matter of litigation before the Tribunal and the Tribunal passed the order in favour of the assessee holding that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble in India as 'royalty' or 'FIS'.' Relevant lines from the said para 3.3 read as under:- "3.3. The amount paid by McKinsey India to Mckinsey & Co., Inc. Or any other McKinsey entity incorporated in the US on account of...........borrowed service charges.......shall not be taxable in India as royalty or fees for included services......." 4. These MAP proceedings are relevant for the AYs 2008-09 and 2009-10 where such service charges were held conclusively not taxable in India. He further mentioned that if the facts are common, the above said conclusions are equally applicable to the appeals under consideration for the AY 2010-2011 too. Ld Counsel for the assessee also submitted that the proceedings pending before the Hon'ble jurisdictional High Court on this issue were also withdrawn by virtue of the judgment dated 23.1.2013, a copy of which is placed at pages 94 & 95 of the paper book. In essence, Ld Counsel for the assessee submitted that the issue under consideration stands covered in favour of the assessee considering the discussion given in paras 3 to 7 of the said order of the Tribunal (supra) for the AY 2007-2008, wherein one of us (AM) is a party to the said order. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court record the issue involved in the appeal how duly been resolved under MAP and given effect by the Assessing Officer. He has referred the decision of the Hon'ble Jurisdiction High Court dated 23/01/2013, wherein the appeals filed by the revenue were allowed to withdrawn and dismissed accordingly. On the other hand, the ld. DR though has not disputed the withdrawn of the appeals however submitted that whether these issues in these appeals have been settled under MAP requires verification. 5. We have heard the rival submissions and considered the relevant material on record, we noted that these issues have already been decided by this Tribunal in the various decisions as mentioned above in the group concerns of the assessee before us. Against the decision of the Tribunal, the revenue filed the appeals before the Hon'ble High Court in 14 cases. Those 14 appeals were withdrawn by the revenue as per the order of the Hon'ble High Court dated 23rd January 2013. We further note that the department had decided to withdraw those appeals before the High Court due to the reason that the issues were duly resolved under MAP. In this connection the letter dated 22/10/2012 as well as 21/01 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
