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TMI Blog2018 (12) TMI 1564X X X X Extracts X X X X X X X X Extracts X X X X ..... ’s own appeal for assessment year 2007-08 Isuue to be restored to the file of the Assessing Officer with a direction to identify the factual aspect of the issue and determine as to whether the impugned income was taxable in India or not so as to bring the assessee within the mischief of section 40(a)(i) of the Act. The determination of this issue will essentially determine the issue whether the provisions of section 201 are attracted in this case. - Decided in favour of assessee for statistical purposes. - ITA No.2241/Del/2012 to 2246/Del/2012 - - - Dated:- 27-12-2018 - SHRI G.D.AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Sh. Ajay Vohra, Sr. Adv., Sh. Anshul Sachar, Adv., Sh. Karan Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered into four Facility Agreements with ABN Amro Bank Stockholm which were guaranteed by the Swedish Export Credit Guarantee Board. Subsequently, the AMN Amro Bank novated a portion of the loans including all the rights and liabilities therein to five other parties. The assessee made payments to ABMN Amro Bank as per the following chart:- Particulars 2003-04 2004-05 2005-06 2006-07 2007-08 2008- 09 Interest payable to novated lenders 73,75,996 3,35,37,700 12,69,33,829 18,36,09,195 84,35,58,169 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k was a tax resident of Sweden in terms of Double Taxation Avoidane Agreement between India and Sweden and, therefore, the payments made to ABN Amro Bank were not taxable in India, such submission did not find favour with the Assessing Officer. Alternatively, the assessee also contended before the Assessing Officer that the interest received by ABN Amro Bank on behalf of other parties in whose favour the loans were novated were tax residents of Sweden/Mauritius and hence entitled to the benefit of provisions of Double Taxation Avoidance Agreement (DTAA) between India and Sweden/India and Mauritius as applicable and as such the interest to the extent payable to such novated loans were not liable to tax in India. However, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been held to be in default u/s 201 of the Act and against which the assessee was now in appeal before us. Both the parties fairly agreed that interest of justice would be served if these appeals were also restored to the file of the Assessing Officer in terms of the directions of the ITAT in assessee s own appeal for assessment year 2007-08 (supra). 4.0 Having heard both the parties and after duly taking into consideration the consensus of both the parties before us that the appeals may be restored to the file of the Assessing Officer, we feel that it will be in the fitness of things if these six appeals are also restored to the file of the Assessing Officer. 4.1 It is seen that in the assessee s appeal for assessment year 2007-08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the interest received by the-ABN-S, except to the extent received for the financing done by itself, was not entirely in his own right but merely as a conduit for making onwards payments to identified original lenders in a transparent manner. As we take note of these facts, it is also important to bear in mind the fact that the liability under section 201(11 r.w.s. 195, which has been invoked in this case for non deduction of tax at source from payments to ABN-S which is the bedrock of disallowance impugned in this appeal, is based on taxability of ABN Amro Bank @ 10% (before grossing up) under Article 11(2) of the Indo-Dutch Tax Treaty and by thus treating ABN Amro Bank as beneficial owner of the interest. It may be noted that under Artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again, we have to acknowledge the fact that learned counsel for the assessee has filed elaborate documentation in support of their stand about tax residency status of beneficial owners of the interest paid by the assessee and has also addressed the arguments on merits, but, in the absence of this aspect of the matter having been examined by the authorities below, we are not inclined to deal with the matter on merits. In our considered view, the right course of action is to identify the factual aspects to be looked into, set out the legal principles, and remit the matter to the file of the Assessing Officer for adjudication de novo by way of a speaking order, in accordance with the law and after giving yet another fair and reasonable opport ..... X X X X Extracts X X X X X X X X Extracts X X X X
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