9911796707
TMI Blog2023 (4) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no dispute that the nature of income that is sought to be taxed is interest income in the instant case. Hence, it would be just and fair to apply the Article 11(2) for the purpose of determining the taxability of the said interest income. Hence, in view of Article 11(2), we direct the Ld. AO to bring to tax interest income @10%. Accordingly, the grounds raised by the Revenue are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ts is liable to tax as its business Income at rate of 40%. 4. Whether on the facts and in the circumstances of the case and in law, Ld CIT(A) has failed to hold the receipt of interest on ECB loan as business income of its PE where he has accepted that the main business of the assessee is finance and loan to its customers and the interest income is part of the income of the assessee and Indian clients have deducted TDS on it." 3. We have heard the rival submissions and perused the materials available on record. We find that assessee is an Indian Branch of Cooperative Centrale Raiffeisen Boerenleen Bank B.A., Netherlands (Rabobank, Netherlands), a company incorporated in Netherlands. It received approval from Reserve Bank of India (RBI) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that assessee has various branches around the world which operate independently and that these branches have separate businesses; hence conducting, inter alia, lending and other business activities. Hence it was practically difficult for assessee to comprehensively collate the details of income earned in India from the transactions undertaken by various personnel of these branches. The assessee also furnished the details of balance amount of taxes deducted at source which were not claimed by it in the return which are tabulated on pages 3 to 5 of the assessment order. It was also submitted that taxes were deducted at source at the rate prescribed in terms of specific Article for Interest provided in the Indo Netherlands Tax Treaty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue is in appeal before us. 3.1. At the outset, there is absolutely no dispute that the Indian branch operations is a Permanent Establishment in India. We find that the taxability of interest income in the hands of the assessee is also not disputed by the Ld.AR. The only dispute that requires to be adjudicated in the instant appeal is with regard to the tax rate to be applied as per Indo Netherlands Tax Treaty. The Ld.DR vehemently argued that the said interest income would become business profit of the Indian branch and hence to be taxed in terms of Article 7 of the Indo Netherlands Tax Treaty and accordingly he argued that the Ld. AO was justified in taxing the same @40%. We are unable to comprehend ourselves to accept to this a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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