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2019 (2) TMI 1644 - HC - Income TaxTDS u/ 195 - withholding of tax - payment on royalty to the payee Company failed to deduct tax at source - DTAA between India and Netherlands - scope of amendment - whether fall within the term royalty? - whether the assessees would be eligible for the benefit under the relevant Double Tax Avoidance Agreements? - HELD THAT:- As decided in NEW SKIES SATELLITE BV, SHIN SATELLITE PUBLIC CO. LTD. [2016 (2) TMI 415 - DELHI HIGH COURT] it is fallacious to assume that any change made to domestic law to rectify a situation of mistaken interpretation can spontaneously further their case in an international treaty. Mere amendment to Section 9(1)(vi) cannot result in a change. It is imperative that such amendment is brought about in the agreement as well. Any attempt short of this, even if it is evidence of the State’s discomfort at letting data broadcast revenues slip by, will be insufficient to persuade this Court to hold that such amendments are applicable to the DTAAs. When the definitions were in fact pari materia (in the absence of any contouring explanations), will continue to hold the field for the purpose of assessment years preceding the Finance Act, 2012 and in all cases which involve a Double Tax Avoidance Agreement, unless the said DTAAs are amended jointly by both parties to incorporate income from data transmission services as partaking of the nature of royalty, or amend the definition in a manner so that such income automatically becomes royalty. It is reiterated that the Court has not returned a finding on whether the amendment is in fact retrospective and applicable to cases preceding the Finance Act of 2012 where there exists no Double Tax Avoidance Agreement. For the above reasons, it is held that the interpretation advanced by the Revenue cannot be accepted. The question of law framed is accordingly answered against the Revenue
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