TMI Blog2019 (4) TMI 2099X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s BNP Paribas(supra), we dismiss this ground raised by the assessee Data processing fees paid by Indian Branch offices of the Appellant to its Singapore branch as income of the Appellant under Article 13 (Royalty and fees for technical services) of the India-France tax treaty - HELD THAT:- The issue is about data processing fees paid by Indian Branch Office of the assessee to Singapore Branch to the tune under Article 13 of the India-France treaty. We find that while deciding the appeal for AY 2009-10 [ 2016 (3) TMI 1355 - ITAT MUMBAI] , the Tribunal has decided the issue. Short credit of taxes given by the AO of tax deducted at source - HELD THAT:- We direct the AO to verify the facts and grant credit of taxes deducted at source as per the provisions of the Act, after giving reasonable opportunity of being heard the assessee. - ITA No. 552/MUM/2018 - - - Dated:- 22-4-2019 - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For the Assessee : Mr. Farrokh Irani, AR For the Revenue : Mr. Samuel Darse, CIT DR ORDER PER N.K. PRADHAN, AM This is an appeal filed by the assessee. The relevant assessment year is 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold the order of the Ld. CIT(A) and dismiss the 1st ground of appeal. 4. The 2nd ground of appeal The AO has erred in subjecting to tax, the data processing fees paid by Indian Branch offices of the Appellant to its Singapore branch, as income of the Appellant to the tune of Rs.325,963.282/- under Article 13 (Royalty and fees for technical services) of the India-France tax treaty. 5. Before us, the Ld. counsel of the assessee submits that the above issue has been decided in favour of the assessee by the Tribunal in assessee s own case from AY 2005-06 to AY 2010-11. Further, it is stated by him that the High Court has not admitted the Department s appeal on this ground for AYs 2006-07 and 2007-08. On the other hand, the Ld. DR supports the order passed by the Ld. CIT(A). 6. We have heard the rival submissions and perused the relevant materials on record. In the above ground of appeal, the issue is about data processing fees paid by Indian Branch Office of the assessee to Singapore Branch to the tune of Rs.325,963,282/- under Article 13 of the India-France treaty. We find that while deciding the appeal for AY 2009-10 (ITA No. 3541/Mum/2014 dated 31.03.2016), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as the decision of Kolkata Special Bench of the ITAT in the case of ABN Amro Bank NV vs. Asst. Director of Income-tax 98 TTJ 295. The contention of the assessee, however, was not accepted by the Ld. CIT (A) and relying on the decision of Mumbai Bench of the ITAT in the case of Dresdner Bank AG vs. Add1. CIT 108 ITD 375, he held that the interest paid by the Indian branches of the assessee bank to its head office and overseas branches was chargeable to tax in India. Accordingly, the addition made by the A.O. on this issue was confirmed by the Ld. CIT(A). 5. We have heard the arguments of both the sides and perused the relevant material on record. As agreed by the Ld. Representatives of both the sides, the issue involved in this appeal of the assessee now stands squarely covered by the decision of Special Bench of the ITAT in the case of Sumitomo Banking Corp. Mumbai wherein it was held, after elaborately discussing the legal position emanating from the interpretation of relevant provisions of Indian Income tax Act as well as treaty, that interest paid to the head office of the assessee bank as well as its overseas branches by the Indian branch cannot be taxed in India being pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source from the said payment of interest made by the PE, the question of disallowance of the said interest by invoking the provisions of s. 40 (a)(i) does not arise, Accordingly we answer question No. 1 referred to this Special Bench in the negative i.e. in favour of the assessee and question No. 2 in affirmative i.e. again in favour of the assessee. As the facts and circumstances of the case during the year under consideration are peri materia, where payment made by assessee to Singapore Branch for data processing, was brought to tax. Respectfully following the order of the Tribunal in assessee s own case as well as the order of the Special Bench of the Tribunal in the case of Sumitomo Mitsui Banking Corporation (supra), we hold that the department was not justified in taxing the data processing charges to the Singapore Branch of the assessee by applying the provisions of Article 13 of the India-France Tax Treaty 13. In effect thus, reversing the stand of the DRP, the coordinate bench has come to the conclusion that the payment on account of data processing charges paid to BNP Singapore cannot be taxed in the hands of the assessee. The conclusion arrived at by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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