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2020 (2) TMI 791 - ITAT KOLKATAIncome accrued in India - permanent establishment in India - India-UK DTAA - FTS income - income of non-resident - HELD THAT:- There was no PE of the Assessee in India during the relevant previous year, the question that would now require consideration is with regard to taxability of the FTS. Considering the fats of the case, as per Article 13(2) of the India-UK DTAA, FTS income of non-resident is taxable @ 15% on gross receipts. Whereas as per section 115A of the Act, FTS is taxable @ 20% on gross receipts. Since, the provisions of the India-UK DTAA is more beneficial, the Assessee is entitled to the benefit of the provisions of section 90(2) of the Act. Accordingly, FTS in the given case would be taxed at the beneficial rate of 15% on gross receipts as provided in Article 13(2) of the India-UK DTAA. We also hold that the tax liability borne by GRSE will also need to be grossed up for arriving at gross receipts of the Assessee and after such grossing up such receipts have to be taxed @ 15%. Whether the assessee ought to be subjected to sec. 234B and 234C interest or not? - Suffice to say, learned co-ordinate bench’s order in assessment year 2009-10 holds that the above interest provisions do not apply in case of the assessee being a non-resident company. We therefore adopt the very reasoning mutatis mutandis to decline the Revenue’s instant substantive grievance as well. TDS u/s 195 - payments made to M/s Appledore International Ltd. in lieu of rendering technical services in UK forming subject-matter of 40(a)(ia) - HELD THAT:- Any disallowance stood rendered infructuous in view of the fact that it did not have any permanent establishment in India. We notice herein as well the tribunal’s earlier order has already concluded that this sec. 40(a)(ia) disallowance issue stood rendered infructuous in view of the fact the sum in question has already been assessed as fee for technical services. The Revenue fails in its identical additional substantive grievance as well. All of the three identical substantive grounds raised at Revenue’s behest fail therefore.
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