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2014 (7) TMI 992 - AT - Income TaxFamily pension received from UK – Pension received from the employer of deceased wife covered under Article 23(1) of Indo-UK DTAA or not - The "pension" is received from the ex-employer by the assessee in his life time while "family pension" is received by the spouse or family members or legal dependent of the deceased employee from the employer of that deceased employee - the assessee received "family pension" from employer of asesseee's deceased wife, thus, it is not related to the pension but it is a clear case of family pension - any pension other than a pension referred to in Article 19(2) of this Convention, or annuity paid to a resident of a Contracting State shall be taxable only in that State. Article 23(3) is related to the items of income which are not included in the foregoing articles to Article 23(3) of this Convention, then notwithstanding the provisions of paragraphs (1) and (2) of Article 23, the same arising in the other contracting state may be taxed in that other state. "Family pension" which was not within the ambit of foregoing articles to the article 23 (3) of Indo-UK Treaty and arose in the other contracting state, may be taxed in other state and the said receipt of the family pension is beyond the purview of Article 23 of Indo-UK DTAA and the same is covered by the residuary article 23(3) of this Convention and, therefore, it was rightly taxed in U.K. i.e. source country - CIT(A) rightly held that the family pension received by the assessee from the employer of deceased wife of the assessee was rightly taxed at source in UK and no amount of family pension is thus taxable in India. Following the decision in DCIT v. Mideast India Ltd. [2009 (1) TMI 311 - ITAT DELHI-G] the expression "may be taxed in that other state" mentioned in Article 23(3) authorizes only the contracting state of source to tax such income and by necessary implication, the contracting state of resident is precluded from taxing such income, specially when the tax has been deducted by the contracting state of source and contracting state of the residence cannot tax it again in the hands of resident assessee - the income received by the assessee from employer of deceased wife of the assessee and when the country of source has deducted tax and assessee received amount after deduction of tax, then the same income cannot be taxed second time in the other contracting state i.e. India – the order of the CIT(A) is upheld – Decided against Revenue.
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