Case Law Details
CIT Vs Indusind Bank Ltd (Bombay High Court)
The issue under consideration is whether the services in relation to issuance of GDRs are covered under the provisions of Section 9(i)(vii) and whether the same liable for TDS under the provisions of Section 195 of the Act?
High Court states that services rendered by Amas Bank were purely of a commercial nature and bore the character of income arising to it wholly outside India, emanating from commercial services rendered by the Bank in the course of carrying on of its business wholly outside India. Such services were neither rendered in India nor utilized in India and therefore, such services did not partake the character of fees for technical services. It is indisputable that the requirement of deducting tax while making such payment would arise only if payee has the liability to pay tax on such payment. HC may recall the assessee desired to raise capital through Global Depository Receipts. To assist the assessee in such process, the assessee had engaged Amas Bank for certain financial services. The payment was made for such financial services rendered by Amas Bank. The GDR was issued outside India. The services were rendered by Amas Bank outside India for raising such funds outside India. It come to the conclusion that the services rendered by Amas Bank were neither rendered in India nor utilized in India and the charterer of income arising out of such transaction was wholly outside India emanating from commercial services rendered by the bank in course of carrying business wholly outside India. The Tribunal was, therefore, correctly of the opinion that such services cannot be included within the expression technical services in terms of Section 9(1)(vii)(b) read with Explanation to Section 9.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. These appeals involve the same assessee, similar facts and legal issues. They have been heard together and would be finally disposed of by this common order. For convenience, we may refer facts from Income Tax Appeal No. 659 of 2018.
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