DEUTSCHE BANK A.G., V. ASST DIT (IT) 1(2),

MA 442/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1715 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 2001-2002
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Permanent establishment
• Section: 6

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,MUMBAI - L BENCH. . , , BEFORE S/SH. D. MANMOHAN, VICE-PRESID ENT & SHRI RAJENDRA,ACCOUNTANT MEMBER (MA NO.442/MUM/2013ARISING OUT OF ITA NO. 3412 /MUM/2005-ASSESSMENT YEAR 2001-02) DEUTSCHE BANK A.G. 5 TH FLOOR, NICHOLAS PIRAMAL TOWWER, PENINSULA CORPORATE PARK, LOWER PAREL, MUMBAI-400013 PAN: AAACD1390F VS. ADIT (INTERNATIONAL TAXATION)- 1(2), 1 ST FLOOR, SCINDIA HOUSE, NAROTTAM ORARRJEE MARG, BALLARD ESTATE, MUMBAI-400038 ( !' / APPELLANT ) ( #$!' / RESPONDENT ) APPELLANT BY : SHRI NIRAJ SHETH RESPONDENT BY : SMT. NEERAJA PRADHAN % & '( ) / DATE OF HEARING : 14-03-2014 * +, '( ) / DATE OF PRONOUNCEMENT : 26-03-2014 -. / O R D E R PER RAJENDRA, A.M. VIDE ITS MISCELLANEOUS APPLICATION (MA),DATED 05.12 .2013,ASSESSEE-BANK HAS SUBMITTED THAT WHILE ADJUDICATING THE APPEAL FOR ASSESSMENT YEAR 2 001-02 (ITA NO. 3412/MUM/2005), GROUND NO.4 RAISED BY IT,WAS NOT DECIDED,THAT THERE WAS MI STAKE APPARENT ON RECORD AND SAME SHOULD BE RECTIFIED U/S.254(2) OF THE ACT. 2. WE HAVE PERUSED THE MATERIAL BEFORE US. WE FIND THAT ASSESSEE HAD RAISED FOLLOWING GROUND OF APPEAL AT SERIAL NO.4 FOR THE AY 2001-02 4.THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN NOT ALLOWING A DEDUCTION FOR RS.70, 97, 938 BEING INTEREST PAID TO HEAD OFFICE/OVERSEAS BRANCHE S. THE APPELLANTS SUBMIT AS UNDER: (I)THE AMOUNT IS NOT TAXABLE AS ONE CANNOT DERIVE I NCOME FROM SELF AND NO TAX IS REQUIRED TO BE DEDUCT ED AT SOURCE. II)ARTICLE 7(1) OF THE TREATY PROVIDES THAT IF AN E NTERPRISE CARRIES ON BUSINESS IN INDIA, PROFITS THA T CAN BE ATTRIBUTED TO ITS PERMANENT ESTABLISHMENT(PE)MAY ON LY BE TAXED IN INDIA. ARTICLE 7(2)OF THE TREATY CREATED A FICTION BY WHICH A PE IS DEEMED TO BE SEP ARATE AND DISTINCTION THE ENTERPRISE OF WHICH IT IS A PE. CARRYING THE FICTION TO ITS LOGICAL CONCLUSION, CHARGE BY HO/APHO AND OVERSEAS BRANCHES COULD HE TREATED AS A PAYMENT BY INDIAN FE TO THIRD PARTIES. HOWEVER AS THESE THIRD PARTIES DO NOT HAVE A PE IN INDIA TO WHICH PROFITS IF ANY CAN BE ATTRIBUTED, AS PER ARTICLE 7(L), SUCH PROFITS WOULD NOT BE CHAR GEABLE TO TAX IN INDIA. (III)WITHOUT PREJUDICE AND IN ANY EVENT, TAX PAID B Y APPELLANT IS ADEQUATE TO COVER TAX IF ANY, PAYABL E THEREON AND HENCE SECTION 40(A)(I) IS NOT ATTRACTED . THE APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. WE FURTHER FIND THAT IN PARAGRAPHS NO. 15-18 OF THE ORDER DATED 17.07.2013 SAID ISSUE HAS NOT BEEN ADJUDICATED UPON. THEREFORE, WE RECALL OUR ORD ER TO THAT EXTENT. REGISTRY IS DIRECTED TO FIX THE HEARING FOR A.Y-2001-02 ON 23.06.2014 FOR THE L IMITED PURPOSE OF DECIDING THE GROUND NO.4. AS A RESULT, M.A. FILED BY THE ASSESSEE STANDS ALLOWED. /,)0 1 2/) 3 4 FD;K X;K FD;K X;K FD;K X;K FD;K X;K FOFO/K VKOSNU FOFO/K VKOSNU FOFO/K VKOSNU FOFO/K VKOSNU '5) F ' ;K ) K 6 S . MA NO. 442/MUM/2013(ARISING OUT OF ITA NO. 3412/MU M/2005) DEUTSCHE BANK A.G. 2 ORDER PRONOUNCED IN THE O PEN COURT ON 26 TH MARCH, 2014. -. '( * +, % 7 8 ' 26 EKPZ EKPZ EKPZ EKPZ ,201 4 ' '( 9& : SD/- SD/- ( . / D.MANMOHAN) ( / RAJENDRA) / VICE-PRESIDENT / ACCOUNTANT MEMBER %;& / MUMBAI, 8 ' /DATE: 26.03.2014 SK -. -. -. -. '( '('( '( #1)1< #1)1< #1)1< #1)1< =<+) =<+) =<+) =<+) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / !' 2. RESPONDENT / #$!' 3. THE CONCERNED CIT(A)/ ;> -' -%? , 4. THE CONCERNED CIT / ;> -' -%? 5. DR L BENCH, ITAT, MUMBAI / <@9 #1)1 12 , ,, ,Y YY Y A , - . . . %;& 6. GUARD FILE/ 9 B& $<) #1) //TRUE COPY// -. % / BY ORDER, / ' ' DY./ASST. REGISTRAR -' 12', , %;& /ITAT, MUMBAI