Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1445 - AT - Income TaxTaxability of interest on income tax refund received - CIT(A) upholding the assessment order taxing the interest on income tax refund as business income u/A 7 of the India- Malaysia DTAA @40% + surcharge @ 5% + cess @ 3% - contention of the assessee is that such interest is taxable under Article -11(2) of the DTAA @10%. HELD THAT:- We find that issue of taxability of interest on income tax refund was considered by the Special Bench in the case of Clough Engineering Ltd. [2011 (5) TMI 562 - ITAT, DELHI] held that interest on income tax refund would be taxable under Article-11 and not as business profits connected with the PE of assessee. Also see Hon'ble Bombay High Court in the case of DIT vs. Credit Agricole Indosuez [2015 (6) TMI 974 - BOMBAY HIGH COURT]. We find merit in ground of appeal by the assessee. Accordingly, the Assessing Officer is directed to tax interest on income tax refund under Article 11(2) of India- Malaysia DTAA. Consequently, ground no.1 to 3 of appeal are allowed.
|