BNP PARIBAS SA, MUMBAI V. DCIT (IT) 1(3)(1), MUMBAI

ITA 444/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1321 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 6; 10; 2; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, L MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.444/MUM/2017 ASSESSMENT YEARS: 2011-12 M/S. BNP PARIBAS SA, 1, NORTH AVENUE, MAKER MAXITY, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI-400051 / VS. DCIT(INT. TAXATION) - 1(3)(1), ROOM NO.119, 1 ST FLOOR, SCINDIA HOUSE, BALLARD ESTATE, MUMBAI-400038 ( !' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACB4868Q #$ % '& / DATE OF HEARING : 29/08/2018 % '& / DATE OF ORDER: 29/08/2018 !' ! / ASSESSEE BY SHRI FARROKH IRANI # ! / REVENUE BY SHRI SAMUEL DARSE CIT-DR ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 30/08/2016 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE FIRST GROUND RAISED BY THE ASSESSEE PER TAINS TO NOT ACCEPTING THE CLAIM THAT THE RATE OF TAX APP LICABLE TO DOMESTIC COMPANIES AND/OR CO-OPERATIVE BANKS FOR ASSESSMENT YEAR 2011-12 IS ALSO APPLICABLE TO THE A SSESSEE IN ACCORDANCE WITH THE PROVISION OF ARTICLE-26 (NON - DISCRIMINATION) OF THE INDIA-FRANCE TAX TREATY. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESS EE, SHRI FAROOKH IRANI, FAIRLY AGREED THAT THIS ISSUE I S COVERED AGAINST THE ASSESSEE BY THE MUMBAI BENCH OF THE TRI BUNAL FOR DIFFERENT ASSESSMENT YEARS. THE LD. CIT-DR, SHR I SAMUEL DARSI ALSO CONTENDED THAT THIS ISSUE IS COVE RED AGAINST THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER, THE ORDER OF T HE TRIBUNAL FOR ASSESSMENT YEAR 2010-11 IN ITA NO.1182/MUM/2015, ORDER DATED 16/10/2017 (PAGE-83 O F ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 3 THE PAPER BOOK FILED BY THE ASSESSEE) FOR READY REF ERENCE AND ANALYSIS:- CHALLENGING THE ORDERS DATED 27/11/2014 OF CIT(A) -55, MUMBAI THE ASSESSEE AND THE ASSESSING OFFICER (A.O.) ARE I N APPEAL FOR THE ABOVE MENTIONED ASSESSMENT YEAR (A.Y). ASSESSEE, EN GAGED IN BANKING OPERATIONS, HAVING HEAD OFFICE IN FRANCE, F ILED ITS RETURN OF INCOME ON 15/10/2010 DECLARED TOTAL INCOME AT RS.37 .14 CRORES. THE CASE WAS SELECTED FOR SCRUTINY UPON SERVICE OF NOTICE U/S. 143(2) DATED 07/09/2011. THE A.O COMPLETED ASSESSMENT U/S. 143(3) R.W.S. 144C(3) OF THE ACT VIDE ORDER DATED 30/04/2014 AND DETERMINED THE TOTAL INCOME AT RS.38.45 CRORES. 2.DURING THE COURSE OF HEARING BEFORE US, THE AUTHO RISED REPRESENTATIVE (AR) AND THE DEPARTMENTAL REPRESENTA TIVE (DR) FAIRLY CONCEDED THAT ISSUE RAISED BY THE ASSESSEE A S WELL AS THE AO HAVE BEEN DEALT WITH AND DECIDED BY THE TRIBUNAL WH ILE ADJUDICATING THE APPEALS FOR THE EARLIER YEARS. ITA/1182/MUM/2015 : 3.THE SOLITARY GROUND OF APPEAL, RAISED BY THE ASSE SSEE IS ABOUT NOT ACCEPTING ITS CLAIM ABOUT RATE OF TAXES. THE ASSESS EE HAD OBJECTED TO THE RATE OF TAX APPLICABLE TO DOMESTIC COMPANIESAND CO-OPERATIVE BANKS WERE ALSO APPLICABLE TO IT IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE-26 (NON DISCRIMINATION) OF INDO FRENCH T AX TREATY. WE FIND THAT WHILE DECIDING THE APPEAL FOR THE AY 1996 -97 (ITA/2760/MUM/2000 DT.28/8/2013) THE TRIBUNAL HAS D ECIDED THE ISSUE AS UNDER : 4.THE THIRD ISSUE IS RELATING TO TAX RATE. THE ASS ESSEE HAS SUBMITTED THAT THE TAX LEVIED AT HIGHER RATE IN THE CASE OF FOREIGN COMPANIES IS DISCRIMINATORY IN NATURE AND, ACCORDIN GLY, RELIEF HAS BEEN SOUGHT ON THIS ACCOUNT. THE CLAIM HAS BEEN REJECTED BY THE AUTHORITIES BELOW. 4.1 WE HAVE HEARD BOTH THE PARTIES IN THE MATTER. W E FIND THAT THIS ISSUE HAS ALREADY BEEN EXAMINED BY THE TRIBUNA L IN THE CASE OF M/S BNP PARIBAS, DECIDED IN ITA NOS. 4601 & 4602 / M/ ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 4 2004,VIDE ORDER DATED 1-7-2013. IN THAT CASE ALSO T HE TAX RATE APPLIED IN THE CASE OF THE ASSESSEE, A FOREIGN COMP ANY WAS 48% COMPARED TO 38% APPLIED IN CASE OF DOMESTIC COMPANI ES. THE ASSESSEE HAD ARGUED THAT IT WAS DISCRIMINATORY AND NOT IN ACCORDANCE WITH LAW. REFERENCE WAS MADE TO NON-DISC RIMINATION CLAUSE IN THE TREATY, AS PER WHICH THERE SHOULD NOT BE ANY DISCRIMINATION BETWEEN THE DOMESTIC AND THE NON-RES IDENT COMPANY. THE TRIBUNAL, HOWEVER, REFERRED TO THE EXP LANATION IN THE SECTION 90, INSERTED IN THE IT ACT WITH RETROSP ECTIVE EFFECT FROM 01-04- 1962 AS PER WHICH THE HIGHER TAX RATE I N CASE OF FOREIGN COMPANY, SHOULD NOT BE REGARDED AS VIOLATIO N OF NON- DISCRIMINATION CLAUSE. THE TRIBUNAL ALSO REFERRED T O THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F ACIT VS. J.K. SYNTHETICS. THE TRIBUNAL ACCORDINGLY, REJECTED THE GROUND RAISED BY THE ASSESSEE. THE FACTS IN THE PRESENT AP PEAL ARE IDENTICAL AND, THEREFORE, RESPECTFULLY FOLLOWING TH E DECISION OF THE TRIBUNAL IN THE CASE OF M/S BNP PARIBAS(SUPRA), WE DISMISS THIS GROUND RAISED BY THE ASSESSEE. 5. RESULTANTLY, APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. FOLLOWING THE ABOVE, EFFECTIVE GROUND OF APPEAL RAI SED BY THE ASSESSEE IS DECIDED AGAINST IT. 2.2. WE NOTE THAT FOR ASSESSMENT YEAR 2004-05 (PAGES 28 -29 OF THE PAPER BOOK), ASSESSMENT YEAR 2 005-06 (PAGE-41), ASSESSMENT YEAR 2006-07 AND 2007-08 (PAG E- 53-54), ASSESSMENT YEAR 2008-09 (PAGE-67), ASSESSME NT YEAR 2009-10 (PAGE-76) AND FOR ASSESSMENT YEAR 2010 -11 (REPRODUCED HEREINABOVE), THE TRIBUNAL HAS DECIDED THIS AGAINST THE ASSESSEE AND FAIRLY AGREED BY THE LD. C OUNSEL FOR THE ASSESSEE. NO CONTRARY DECISION WAS BROUGHT TO O UR NOTICE, THEREFORE, RESPECTFULLY FOLLOWING THE AFORE SAID ORDER OF THE TRIBUNAL, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE, ACCORDINGLY, DISMISSED. ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 5 3. THE NEXT GROUND RAISED BY THE ASSESSEE PERTAINS TO TAXABILITY OF INTEREST PAID BY INDIAN BRANCH OFF ICE OF THE ASSESSEE TO ITS HEAD OFFICE, SUBJECT TO PROVING THE ASSESSEE THAT IT MADE SUCH CLAIM IN ITS RETURN OF INCOME FIL ED IN ORIGINAL FOR ASSESSMENT YEAR 2011-12 BY WAY OF NOTE S TO RETURN THAT WERE UPLOADED WITH THE SAME RETURN OF I NCOME. 3.1. DURING HEARING, THE LD. COUNSEL FOR THE ASSES SEE CLAIMED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL FOR EARLIER ASSESSMENT YEA RS. THE ASSESSEE HAS ALSO FILED VARIOUS ORDERS IN ITS PAPER BOOK. THE LD. CIT-DR THOUGH DEFENDED THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE ISSUE HAS BE EN DECIDED IN FAVOUR OF THE ASSESSEE BY THE EARLIER OR DERS OF THE TRIBUNAL. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER, THE ORDER OF T HE TRIBUNAL FOR ASSESSMENT YEAR 2010-11 IN ITA NO.1374/MUM/2015, ORDER DATED 16/10/2017 (PAGE-85 T O ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 6 87 OF THE PAPER BOOK FILED BY THE ASSESSEE) FOR REA DY REFERENCE AND ANALYSIS:- 4.1.SECOND GROUND OF APPEAL ABOUT INTEREST PAID B Y INDIAN BRANCH OFFICES TO THE ASSESSEE , AMOUNTING TO RS.4, 19,26,420/-.IT WAS BROUGHT TO OUR NOTICE THAT IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN AY 2005-06(ITA/339/MUM/2010 ;16/07/2014 ) WHICH READS AS UNDER :- 4. IN GROUND NO.2, THE ASSESSEE IS AGGRIEVED BY THE ACTION OF THE LOWER AUTHORITIES FOR TAXING THE INTEREST PA ID BY THE INDIAN BRANCH OF THE ASSESSEE TO ITS HEAD OFFICE AN D OVERSEAS BRANCHES AMOUNTING TO RS.3,09,48,018/-, AP PLYING THE PROVISIONS OF ARTICLE 12 (INTEREST OF INDIAFRAN CE TAX TREATY). IN THIS REGARD, LEARNED AR PLACED ON RECOR D THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR TH E AYS. 2001-02 TO 2002-03. IN AY 2001-02, THE TRIBUNAL HAS DEALT WITH THE ISSUE AT PARA 13, 14, 15 & 16 AT PAGE 5 AN D DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SIMILA RLY THE TRIBUNAL IN ASSESSEES OWN CASE IN THE AY 2002-03 & 2003- 04 DECIDED THE ISSUE AT PAGE 2, 3 & 6 AT PARA 3,4,5 , & 13. LEARNED AR ALSO PLACED RELIANCE ON THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF SUMITOMO MITSUI BANKIN G CORPORATION VS. DDIT(IT), REPORTED IN (2012) 145 TT J (MUMBAI)(SB) 649, WHEREIN EXACTLY SIMILAR ISSUE HAS BEEN DEALT AT PARA 88 PAGE 700 & 701. 4.1 ON THE OTHER HAND, IT WAS CONTENDED BY THE LEAR NED DR THAT MUTUALITY ISSUE WAS NOT ARGUED BEFORE THE LOWE R AUTHORITIES, WHETHER TRANSACTION IS COVERED BY THE SPECIAL BENCH, THE ISSUE OF MUTUALITY WAS NOT CONSIDERED BY THE SPECIAL BENCH. HE ALSO RELIED ON THE OBSERVATION MA DE BY HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS. CIT, REPORTED IN (2013) 350 ITR 509 (SC) AND OUR AT TENTION WAS INVITED TO PARA 23. IT WAS CONTENDED BY THE LEA RNED DR THAT TAKING LOAN FROM HO AT INTEREST ITSELF SHOWS T HAT BORROWING IS ON COMMERCIAL BASIS, THEREFORE, THERE IS NO QUESTION OF APPLYING PRINCIPLE OF MUTUALITY. HE FUR THER CONTENDED THAT IF PRINCIPLE OF MUTUALITY IS APPLIED IN ALL THE CASES, SECTION 44C WILL BE REDUNDANT. THE CITDR MR. AJAY KUMAR SHRIVASTAVA FURTHER CONTENDED THAT THE ITAT S B IN CASE OF SUMITOMO MITSUI BANKING CORPORATION 136 ITD 66(MUM)(SB) HAS HELD THAT THE INTEREST RECEIVED BY ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 7 HO(GE) IS NOT TAXABLE IN HANDS OF GE IN INDIA UNDER DOMESTIC LAW ON PRINCIPLES OF MUTUALITY AS THE INTE REST PAID BY PE TO GE IS PAYMENT TO SELF. AS PER LEARNED DR, BEFORE THE SB, THE COUNSELS FROM BOTH THE SIDES DID NOT DI SPUTE THE POSITION THAT SUCH INTEREST PAYMENTS WERE COVERED B Y PRINCIPLES OF MUTUALITY BEING PAYMENT TO SELF, THOU GH THE REVENUE ARGUED THAT FOR PURPOSE OF TAXATION UNDER D OMESTIC LAWS ALSO THE PE AND GE SHOULD BE TREATED AS SEPARA TE ENTITIES. THIS ARGUMENT WAS REJECTED BY ITAT ON GRO UNDS THAT UNDER THE DOMESTIC LAW THERE IS ONLY ONE ASSES SABLE ENTITY I.E. GE AND PE IS NOT AN INDEPENDENT PERSON AND IT IS PART OF GE. 4.2 IN VIEW OF THE ABOVE, LEARNED CITDR STRONGLY DE FENDED THE ORDER OF THE AO ON THE PLEA THAT THE DECISION O F SB HINGES ON THE ASSUMPTION THAT THE IMPUGNED TRANSACT IONS ARE COVERED BY PRINCIPLES OF MUTUALITY BEING PAYMEN T TO SELF WHEREAS THE NON APPLICABILITY OF MUTUALITY TO SUCH TRANSACTION WAS NEITHER ARGUED BY ANY SIDE NOR WAS ANY OBJECTION RAISED TO SUCH ASSUMPTION. 4.3 BY REFERRING TO THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF BANGALORE CLUB (SUPRA), LD. DR SUBMITTED THAT FOLLOWING PRINCIPLES WERE FOLLOWED B Y APEX COURT IN BANGALORE CLUB(SUPRA) WITH REGARD TO APPLI CABILITY OF PRINCIPLES OF MUTUALITY: (I) THERE SHOULD BE COM PLETE IDENTITY BETWEEN THE CONTRIBUTORS AND PARTICIPATORS . (II) THE MUTUAL ACTIVITY IS RESTRICTED TO WITHIN MEMBERS OF MUTUAL GROUP (CONTRIBUTORS AND PARTICIPATORS) AND NOT WITH OUTSIDERS. (III) ONLY THAT SURPLUS WHICH IS EARNED OUT OF THE TRANSACTIONS BETWEEN THE CLOSED GROUP OF MEMBERS ON LY AS A CLASS IS EXEMPT BUT INCOME ARISING FROM OPERATION S WITH THIRD PARTIES WAS OUTSIDE OF THE MUTUALITY, RUPTURI NG THE 'PRIVITY OF MUTUALITY', CONSEQUENTLY, VIOLATING THE ONE TO ONE IDENTITY BETWEEN THE CONTRIBUTORS AND PARTICIPATORS . (IV) THE TRANSACTIONS RESULTING IN INCOME ARE NOT IN NAT URE AKIN TO BUSINESS, OR TAINTED WITH COMMERCIALITY. (V) IT CANNOT BE SAID THAT INCORPORATION WHICH BRINGS INTO BEING A L EGAL ENTITY SEPARATE FROM ITS CONSTITUENT MEMBERS IS TO BE DISREGARDED ALWAYS AND THAT THE LEGAL ENTITY CAN NE VER MAKE A PROFIT OUT OF ITS OWN MEMBERS ... ' THE PRIN CIPLE THAT NO ONE CAN MAKE A PROFIT OUT OF HIMSELF IS TRUE ENO UGH BUT MAY IN ITS APPLICATION EASILY LEAD TO CONFUSION, AT WHAT POINT, DOES THE RELATIONSHIP OF MUTUALITY END AND T HAT OF TRADING BEGIN' IS A DIFFICULT AND VEXED QUESTION. A S PER LEARNED DR THE NEXT TEST OF MUTUALITY TO APPLY IS T HAT ALL TRANSACTIONS MUST BE WITHIN THE MEMBERS OF MUTUAL G ROUP. ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 8 THE ASSESSEE BEING IN BANKING BUSINESS IS DEALING W ITH THIRD PARTIES AS WELL AS ITS OWN BRANCHES TO EARN I TS BUSINESS INCOME. THE MONEY ADVANCED BY BO TO HO OR HO TO BO ARE DURING THE COURSE AND PART OF REGULAR BAN KING ACTIVITIES WHICH ARE ALSO CARRIED IN SIMILAR FASHIO N WITH THIRD PARTIES. HENCE THESE ARE COMMERCIAL TRANSACTI ONS NOT LIMITED AMONGST THE MUTUAL ENTITIES BUT EXTENDED TO THIRD PARTIES ALSO AND THE PRIVITY OF MUTUALITY GETS DILU TED FOR THIS REASON. AGAIN REFERRING TO THE DECISION OF HONBLE SUPREME COURT, LEARNED DR CONTENDED THAT ALL TRANSACTIONS B ETWEEN LEGAL ENTITY AND ITS CONSTITUENT MEMBERS (SUCH AS B O AND HO) ARE NOT ALWAYS COVERED BY PRINCIPLES OF MUTUALI TY. THE PRINCIPLE THAT NO ONE CAN TRADE WITH HIMSELF IS NOT UNIVERSALLY APPLICABLE. IT MIGHT HERE BE POINTED OU T THAT IT HAS BEEN HELD BY THE HOUSE OF LORDS IN SHARKEY VS. WERNHER (1956) AC 58 ; (1956) 29 LTR 962 (HL) THAT THE GENERAL PROPOSITION THAT NO ONE COULD TRADE WITH HI MSELF AND MAKE IN ITS TRUE SENSE OR MEANING TAXABLE PROFI TS BY DEALING WITH HIMSELF IS NOT UNIVERSALLY TRUE AND TH AT THERE ARE SITUATIONS IN WHICH A MAN COULD BE SAID TO MAKE A PROFIT OUT OF THE CONSUMPTION OF HIS OWN GOODS. THE HONBLE SUPREME COURT IN BANGALORE CLUB (SUPRA) ALS O BAS HELD THAT THIS MAXIM IS NOT UNIVERSALLY APPLICABLE. WHEN THE BUSINESS ACTIVITY OF BANKING BY ASSESSEE BANK C OMPRISES OF CONTINUOUS/INTEGRATED INFLOWS AND OUTFLOWS OF MO NEY WITH SEVERAL ENTITIES INCLUDING CUSTOMERS, OTHER BA NKS AND ITS OWN BRANCHES, THEN THE PROFIT OF THE BANKS BUS INESS WOULD DEPEND ON NET INFLOWS OUT OF ALL OPERATIONS A ND IT CANNOT BE SAID THAT A PART OF SUCH TRANSACTIONS ARE GOVERNED BY MUTUALITY BY DISINTEGRATING SOME OF THE CONSTITUENT TRANSACTIONS BETWEEN BO AND HO OUT OF T HE ONE COMPOSITE BUSINESS OF BANKING AND THEN TO SAY THAT SUCH TRANSACTIONS ARE GOVERNED BY MUTUALITY. WHEN THE TO TAL PROFIT OF A BANK REPRESENTS THE RESULTANT AGGREGATI ON OF DIFFERENT ITEMS OF ACTIVITY THEN HOW COULD IT BE SA ID THAT THE PROFIT FROM EACH ITEM OF ACTIVITY (INCLUDING FROM A CTIVITY BETWEEN BO & HO) WHICH MAKES UP THAT TOTAL IS ONLY A NOTIONAL ONE TO THE EXTENT IT ARISES FROM TRANSACTI ONS BETWEEN BO & HO AND NOT THE ACTUAL OR REAL PROFIT. IF THE PROFITS FROM MULTIPLE ACTIVITY AS A BANKING BY BO O R HO IS CONSIDERED IN ITS ENTIRETY AS TWO INDEPENDENT OPERA TING ENTITIES, THEN THE PRINCIPLE THAT NO ONE CAN TRADE WITH ITSELF WILL NOT ARISE AT ALL. THE APPLICABILITY OF PRINCIP LE OF MUTUALITY HAS TO BE TESTED QUA THE ENTIRE ACTIVITY OF BANKING BUSINESS AND NOT QUO. THE PART OF BUSINESS ACTIVITY COMPRISING OF TRANSACTIONS BETWEEN BO AND HO ONLY W HEN ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 9 THE ULTIMATE BUSINESS PROFIT IS SUM TOTAL OF ALL TH E ACTIVITIES CARRIED BY THE BO OR HO IN ITS JURISDICTION OF OPER ATION OF BANKING BUSINESS, THE PRINCIPLE OF TRADING WITH ONE SELF HAS TO BE SEEN W. R. T. WHOLE ACTIVITY COMPRISING OF TH E BUSINESS AND NOT BY DISINTEGRATING VARIOUS INTEGRATED OPERAT IONS OF A COMMON BUSINESS. 4.5 WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF R IVAL PARTIES, GONE THROUGH THE ORDERS OF AUTHORITIES BEL OW AS WELL AS ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CA SE AND ALSO THE ORDER OF THE SPECIAL BENCH IN THE CASE OF SUMITOMO MITSUI BANKING CORPORATION (SUPRA). DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA) IS DISTINGUISHABLE ON FACTS WHERE INTEREST INCOME WAS EARNED BY ASSESSEE CLUB FROM THIRD PARTY I.E. B ANKS WITH WHICH DEPOSIT WAS MADE. HOWEVER, IN THE INSTAN T CASE HO HAS GIVEN FUNDS TO ITS BRANCH I.E. ASSESSEE. FOL LOWING WERE THE OBSERVATIONS AT PARA OF SPECIAL BENCH 88 : - XXXXX 4.6 IN VIEW OF THE ABOVE, SINCE THE ISSUE UNDER CONSIDERATION IS COVERED NOT ONLY BY THE ORDER OF T HE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2001-02 TO 2003-04 BUT ALSO BY THE ORDER OF THE ITATS SPECIAL BENCH IN THE CASE OF SUMITOMO MITSUI BANKING CORPORATION (SUPRA), WE HOLD THAT THE DEPARTMENT WAS NOT JUSTIF IED IN SUBJECTING TO TAX THE INTEREST PAID BY THE INDIAN B RANCH OF THE ASSESSEE TO ITS HEAD OFFICE AND OVERSEAS BRANCH ES APPLYING THE PROVISIONS OF ARTICLE 12 OF INDIA-FRAN CE TAX TREATY. CONSIDERING THE ABOVE SECOND GROUND IS DECIDED AGAI NST THE AO. AS A RESULT APPEALS FILED BY THE ASSESSEE AND THE A O STAND DISMISSED. 3.3. WE FIND THAT THE ISSUE TAXABILITY OF INTEREST PAID BY THE ASSESSEE TO ITS HEAD OFFICE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL FOR ASSESSME NT YEAR 2000-01 AND 2001-02 (PAGE-20 OF THE PAPER BOOK), ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 10 ASSESSMENT YEAR 2002-03 AND 2003-04 (PAGE-27 ), ASSESSMENT YEAR 2004-05 (PAGE-36), ASSESSMENT YEARS 2006-07 & 2007-08 (PAGES 54-56) AND FOR ASSESSMENT YEAR 2010-11, REPRODUCED HEREINABOVE. NO CONTRARY DECISI ON WAS BROUGHT TO OUR NOTICE BY EITHER SIDE AND MORE SPECIFICALLY THE REVENUE, THEREFORE, FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, THIS IS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 29/08/2018. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER $ MUMBAI; ( DATED : 29/08/2018 F{X~{T? P.S / /. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1' ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1' / CIT(A)- , MUMBAI, ITA NO.444 /MUM/2017 M/S. BNP PARIBAS SA 11 5. 3#4 .' , 0 *+& *5 , $ / DR, ITAT, MUMBAI 6. 6 7$ / GUARD FILE. ! / BY ORDER, /! (DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI