Dynamic Drilling & Services Pvt Ltd, New ... vs Acit Circle-7(2), New Delhi on 8 March, 2022
In so far as the other decisions relied by the Ld CIT(A) is DCIT vs
Power Machines India Ltd ITA No.2221/Del/2014. In that case, relying
of the provisions of sec 40(a)(ia) r.w.s 2(28A) of the IT Act, it was
decided by Hon'ble Bench that foreign guarantee commission paid to a
foreign bank is taxable in India in absence of any PE of the foreign
bank in India. The Ld CIT(A) ignored the very important feature of the
judgment which is the absence of any discussion of DTAA with the
residence country. Since, in the present case, the taxability of Income
is required to be decided with reference to DTAA with Singapore, the
decision of the bench in the said case does not help the cause of the
revenue.