TMI Blog2024 (2) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... 15% respectively - HELD THAT:- JV had approached the TDS Officer u/s 195 of the Act seeking a direction regarding the rate of TDS on the aforesaid payments. In response to the application filed by the JV, TDS officer has issued an order under section 195 of the Act, wherein he has directed the JV to deduct tax at the rate of 10% on technical know-how fee and at the rate of 15% on financial commitment fee. The aforesaid rates were applied by the TDS Officer treating the technical know-how fee as FTS and the financial commitment fee as interest income. The rate of TDS was determined in terms with the rate of tax for FTS and interest income as per the treaty provisions. Whereas, the Assessing Officer has taxed the entire receipts by applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. 2. On the facts and circumstances of the case, the CIT(A) erred in relying solely on the order passed by TDS officer u/s 195(2) in the case of Continental Foundation Joint Venture. Issue in the order u/s 195(2) was limited to TDS liability of the deductor. It cannot be the sole basis for determining the tax rate applicable to the assessee 3. On the facts and circumstances of the case, the CIT(A) erred and in holding that Technical know-how fee was tax able @1 0% and financial commitment fee @ 15%. 4. On the facts and circumstances of the case, the CIT(A) erred in holding the income of the assessee as taxable at reduced rates without sufficient material on record to establish the nature of receipts and residence status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961 (in short the Act ). As observed by the Assessing Officer, in spite of notices being issued to the assessee to participate in the assessment proceeding and to furnish necessary information, the assessee remained non-compliant. As a result, the Assessing Officer proceeded to complete the assessment under section 144 of the Act to the best of his judgment. While doing so, the Assessing Officer added back the receipts of Rs. 69,93,54,377/- to the assessee. Against the assessment order so passed, the assessee preferred an appeal before learned first appellate authority. In course of proceeding before the first appellate authority, the assessee furnished detailed submissions along with supporting evidences. It was submitted by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as FTS and the financial commitment fee as interest income. The rate of TDS was determined in terms with the rate of tax for FTS and interest income as per the treaty provisions. Whereas, the Assessing Officer has taxed the entire receipts by applying the normal rate of tax as per the provisions of domestic law. 7. There is no dispute that the assessee has willingly offered the entire receipts to tax in India. The dispute is only with regard to applicable rate of tax on such receipts. Since, the assessee is resident of Canada and is entitled to get benefit under India Canada DTAA, in our view, the assessee must get benefit of the tax rate provided under the DTAA. In fact, being conscious of this factual position, the TDS Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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