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2013 (10) TMI 759 - AT - Income TaxRe-opening of case u/s 147 of the Income Tax Act - The words used in Article 12(1) of DTAA was "paid to a resident of other contracting state". The term royalties also means "payment of any kind received" – Held that:- Relying upon the Hon’ble Bombay High Court judgment in the case of DIT (IT) vs. M/s Siemens Aktiengesellschaft [2012 (12) TMI 737 - BOMBAY HIGH COURT], it is held that taxation of Assessee regarding the royalties income will be done on receipt basis as far as recipient is concerned who is a resident of the other contracting state. No reason to re-open the assessment under section 147 as per the satisfaction recorded by AO - Entire information was furnished and was available with AO at the time of assessment, AO made inquiries particularly with reference to the claim of TDS of part amount when certificates were filed to an extent of ₹ 7.81 crores and also the fact that assessee's taxation on receipt basis was accepted and the order of the CIT (A) in assessment year 2003-04 was already on record by the time the re- assessment proceedings were initiated - Reopening the assessment can only be considered as change of opinion from that of his predecessor who inquired and accepted assessee's return under section 143(3) – Decided in favor of Assessee. The payee's credited the amount to assessee, deducted the tax as per the provisions of the Act, remitted to the Govt. of India and issued certificates. What assessee has claimed was only offering the income which it received and also taking credit only to the extent of income offered as per the provisions of Section 199 of the I.T. Act. Failure on the part of AO in not giving credit to the entire TDS made when he brought the entire amount to tax on accrual basis gave rise to the demand afresh with unnecessary implications – Therefore, credit of TDS allowed – Decided in favor of Assessee.
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