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2011 (3) TMI 1707 - AT - Income TaxTax treaty between India and USA (DTAA) - Payment of receipts taxed u/s 09(1)(vii) - HELD THAT:- We have considered the facts of the case and submissions made before us. that the assessee has received payments from persons residents in India. However, the receipts have been taxed u/s 9(1)(vii), Explanation 2, Clause (vi) thereunder. The decision in the case of Asia Satellite Telecommunications Company Limited [2011 (1) TMI 47 - DELHI HIGH COURT] is to the contrary and in favour of the assessee. It is also a matter of fact on record that the assessee is a tax resident of USA and, therefore, the provisions contained in the DTAA are applicable. However, we are of the view that we need not go into the provisions of the DTAA because of the provision contained in Section 90(2). This provision provides that where the Central Government has entered into an agreement with the Government of any country outside India under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall applied to the extent they are more beneficial to that assessee. The assessee is found to have incurred no liability to tax . Therefore, even if the provisions of the treaty go against the assessee, it has to be granted the benefit under which no liability to tax can be fastened on the assessee.
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