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2013 (1) TMI 622 - AT - Income TaxIndia-Indonesia DTAA - Royalty receipt - Held that:- After going through the orders of Group Companies of McKinsey where similar issue has been adjudicated in favour of the assessee no need of further deliberation into the issue. AO has nowhere established that pieces of information supplied by the assessee were arising out of exploitation of the know-how generated by the skills or innovation of the persons who possesses such talent. Information received by McKinsey India was in the nature of data and same cannot be held to payment received as Royalty. Word 'Royalty' in taxation-terminology has its distinct meaning and the amounts received by the assessee does not fall in that category. As far as taxing the receipts under the head 'Other Income' is concerned, it is to be opinion that residuary head is analogous to sections 56-57. If a certain receipt cannot be taxed under any other head, only then the sections dealing with 'Income from Other Sources', come into play in domestic taxation matters. Likewise, under the DTAAs, if a sum can be taxed under any other Article, provisions of Article 22 will not be applicable. Thus in light of the earlier decisions of the Mumbai Tribunal income received by the assessee-company form McKinsey India is not to be treated as Royalty-rather it has to assessed as business income as per Article 7 of the DTAA - in favour of the assessee.
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