Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 1198 - AT - Income TaxRate of tax deductible on the payments made to the non-resident USA company in respect of Fee for Technical Services (FTS) - @25% under section 260AA (1) (i) OR @15% - order passed under section 201(1) and 201(1-A) - India - USA DTAA - CIT-A held that the action of the Assessing Officer in treating the assessee as assessee in default on the ground that instead of 20% it should have deducted tax at the rate of 25% was not justified and granted relief on that count, since the assessee had withheld tax at source at the rate of 20% as per clause (iii) of section 206AA (1) - HELD THAT:- Hon’ble jurisdictional High Court in the case of Danisco India Private Limited [2018 (2) TMI 1289 - DELHI HIGH COURT] dealt with this aspect and while approving the decision of the Tribunal in the case of Serum Institute of India Ltd. [2015 (6) TMI 26 - ITAT PUNE] held that having regard to the position of law explained in Azadi Bachao Andolan [2003 (10) TMI 5 - SUPREME COURT] and later followed in numerous decisions that a Double Taxation Avoidance Agreement acquires primacy in such cases, where reciprocating states mutually agree upon acceptable principles for tax treatment, the provision in Section 206AA (as it existed) has to be read down to mean that where the deductee i.e the overseas resident business concern conducts its operation from a territory, whose Government has entered into a Double Taxation Avoidance Agreement with India, the rate of taxation would be as dictated by the provisions of the treaty. Issue being covered squarely by the order of the Tribunal in the case of Serum Institute of India Ltd. (supra) and the decision of the Hon’ble High Court in the case of Danisco India Private Limited (supra), in the absence of any decision to the contrary, while respectfully following the same, we do not see anything illegality or irregularity in the findings of the Ld. CIT(A).
|