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2013 (8) TMI 138 - AT - Income TaxDTAA between India and Singapore - assessee is a company resident of Singapore engaged in the business of Computerized Reservation System (CRS) - assessee received payment from its activity of providing airline reservations in India, which was not offered for taxation stating that it did not have any permanent establishment (PE) in India - AO estimated of the profit margin at 10% of the receipts attributable to Indian operations - Held that:- Considering the assessee's own case for the earlier years ITAT has held that 15% of the receipts should be attributed as income accruing or arising in India and since 25% of the receipts were paid to ADSIL in India as marketing fees, there was no income chargeable to tax as relying on Galileo International Inc. v. DCIT [2007 (11) TMI 329 - ITAT DELHI-B] as affirmed by Hon'ble Delhi High Court [2009 (2) TMI 497 - Delhi High Court]. Refund by the Income-tax Department which included interest - Revenue taxed it at 20% as per section 115A as per Article 24 of Indo-Singapore DTAA wheres assessee claimed taxation of such interest @ 15% as per Article 11 of the DTAA - Held that:- The burden is on the assessee to prove that the amount of income was remitted to or received in Singapore. This burden can be discharged by showing a credit in the bank account maintained by the assessee in Singapore. Production of a copy of pay in slip showing deposit of refund voucher in a bank a/c in Singapore which is eventually credited to the bank account, or even a certificate from a Bank in Singapore in this regard, are the instances of sufficient compliance of the requisite condition. A bald submission not backed by any supporting evidence to prove the fulfillment of the requisite condition, cannot be a good reason for drawing an inference in favour of the assessee. It is more so because there is an unambiguous command of Article 24 which casts obligation on the assessee to prove this fact positively. Thus the authorities below were justified in refusing the benefit of Article-11 of the DTAA by taxing the interest on I.T. refund @ 20% as per section 115A. Claim of reimbursement of expenses - Held that:- As seen from the findings given by the CIT (A) on the first issue is viewed in the light of superseding order holding the attribution of income from Indian operations at 15% of the gross receipts, there remains no doubt that the marketing fees paid to ADSIL is still more than the income attributable to the business operations in India including the amount of ₹ 1.72 crore - ground raised by the assessee that the expenses reimbursed by the ADSIL amounting to ₹ 1.72 crores should be considered as reimbursement of expenses is liable to be and hereby dismissed. Against assessee.
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