Assessee, a Singapore-based company, was a registered FII with SEBI and offered interest income received on rupee-denominated bonds/government securities to tax at the rate of 5 per cent under section 115AD. AO computed tax at the rate of 15 per cent under article 11 of DTAA without examining the nature of investments on which interest income was received, the matter was remanded for reconsideration. Held that offshore distribution commission income was in nature of business income and in absence of permanent establishment, said the commission is not taxable in India (AY. 2014-15, 2015-16)
DCIT v. Credit Suisse (Singapore) Ltd. (2022) 195 ITD 652 / 96 ITR 77(SN) / 219 TTJ 1078 (Mum.)(Trib.)
S. 9(1)(v) : Income deemed to accrue or arise in India-Interest-Rate of tax-Government securities-Interest income received on rupee-denominated bonds-Rate applicable at the rate of 5 per cent or 15 per cent-Matter remanded-Offshore distribution commission income-No permanent establishment-Commission is not taxable in India. [S. 9(1)(i), 115AD, Art. 7, 11]