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TMI Blog2012 (8) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... dified vide letter dated 03/06/2011 and they read as under:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred while holding that only 25% of payment of Rs. 2,37,69,750/- is 'fee for technical services' and rest 75% of payment is business receipt. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred by not treating the entire payment of Rs. 2,37,69,750/- as fee from technical services." 2.1 Ground of appeal raised by the revenue for assessment year 2004-05 reads as under: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) while upholding the estimation of 25% of payment of Rs.2,24,14,290/- for " information system" erred in directing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case and in law, the Ld. CIT(A) erred in considering 75%' of reimbursement of expenses as income attributable to service Permanent Establishment. 4. On the facts and in the circumstances of the case Learned CIT(A) erred in confirming estimation of 25% of the gross receipt as being profit on the transaction liable to tax. 5. On the facts and in the circumstances of the case Learned CIT(A) erred in bringing to tax the portion of the interest that stood waived. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levy of tax on the interest amount the recovery of which was waived, under section 115A of Income Tax Act, 1961 without giving benefit of lower rate of tax as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to Article 12(4) AO has treated the payments received by the assessee as "fees for included services" and has held that the same will be liable to be taxed under the provisions of Article 12(4)(b) of the DTAA. 3.3 In para-9 of assessment for assessment year 2004-05 the AO has also mentioned that the associated concern of the assessee namely M/s Bunge Agribusiness India Pvt. Ltd. constitutes Service Permanent Establishment in view of Article 5.6(b), as the Bunge Singapore's personnel visits Bunge India from time to time to provide support services and US $ 4,92,000 can also be taxed as business profit under Article-7 of DTAA between India & Singapore. Accordingly taking the stand taken by AO in assessment year 2003-04 he estimated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er issue relating to interest it is the submission of Ld. A.R that as per the decision of Delhi ITAT in the case of CSC Technology Singapore Pte Ltd. vs. Asstt. DIT,Delhi, 50 SOT 399, such income cannot be considered in the source country unless this amount had been received by the foreign company. Therefore, he submitted that this matter may also be restored back to the file of AO with a direction to tax only that part of interest which has been received by the foreign company. 5. Ld. D.R relied upon the assessment order and pleaded that the action of AO should be sustained. However, he accepted the existence of Service Permanent Establishment of the assessee in India and applicability of Indo- Singapore DTAA to the case of assessee is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DTAA. For the sake of convenience Para-6 of Article 12 of aforementioned DTAA is reproduced below. "6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the interest we consider it just and proper to restore the said ground also to the file of AO with a direction to readjudicte the issue afresh in the light of the aforementioned decision of Tribunal relied upon by the Ld. A.R and also as per law after giving the assessee a reasonable opportunity of hearing. We direct accordingly. Thus the grounds raised by the assessee in cross objections are considered to be partly allowed for statistical purposes in the manner aforesaid. 7. In the result, the appeals filed by the revenue are allowed for statistical purposes and cross objections filed by the assessee is partly allowed for statistical purposes in the manner aforesaid. Order pronounced in the open court on the 27th day of June,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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