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2014 (11) TMI 605 - HC - Income TaxRight to use any industrial, commercial or scientific equipment – Royalty u/s 9 or not – Whether the Tribunal was right in holding that the amount received by the assessee for hiring out dredgers to an Indian Company of the same name for use in Indian ports is not taxable in India in terms of the Double Taxation Avoidance Agreement with the Netherlands - Held that:- Under a Notification No.GSR 382(E) DATED 27.3.1989, the convention, between the Government of Republic of India and the Kingdom of Netherlands for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, came into force w.e.f. 21.1.1989 - both Governments have agreed and the DTAA agreement with seven chapters and 30 Articles was signed - the 'payments for the use of equipment' originally found in clause (1) of Article 12 as defined in clause (6) was incorporated in the definition of the term Royalties in clause 4 w.e.f.1.4.1991 and subsequently deleted w.e.f.1.4.1998 and thereby completely taken out from clause (1) and (2) of Article 12 - the payment for the use of equipment or any consideration for the use of , for the right to use industrial, commercial or scientific equipment is deleted and it is not taxable in the contracting State in which they arise viz., in the given case India - the appellate authority below has rightly considered Article 12(4) of the DTAA agreement between Netherlands and India and is right in holding that the amount received by the assessee for hiring out Dredgers to an Indian Company of the same name for use in Indian Ports is not taxable in India – Decided against revenue.
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