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2016 (5) TMI 697 - HC - Income TaxTaxability of administrative fee paid - Indo-US DTAA - applicability of Section 40 (a) (i)- Held that:- A plain reading of Section 90 (2) of the Act, makes it clear that the provisions of the DTAA would prevail over the Act unless the Act is more beneficial to the Assessee. Therefore, except to the extent a provision of the Act is more beneficial to the Assessee, the DTAA will override the Act. This is irrespective of whether the Act contains a provision that corresponds to the treaty provision. In light of the above discussion, question (b) is answered in the affirmative, i.e., in favour of the Assessee and against the Revenue by holding that Section 40 (a) (i) of the Act is discriminatory and therefore, not applicable in terms of Article 26 (3) of the Indo-US DTAA. ITAT was correct in allowing a deduction being the administrative fee paid by the Assessee to HIAI. - Decided in favour of the Assessee Allowance of prior expenses - Held that:- The Court concurs with the view expressed by the ITAT in the present case, that the expenses for the period 1st January 2000 to 31st March 2000 accrued as a liability to the Assessee only during the previous year and that the said expenditure was rightly allowed as deduction during the AY in question - Decided in favour of the Assessee Payment of administrative fee - Held that:- The Court concurs with the view expressed by the ITAT that in respect of the fee paid for the period relating to the period 1st January 2001 to 31st March 2001, the liability should be held as accrued and arisen during the previous year relevant to the AY 2001-02 and therefore, is rightly allowed by the ITAT. - Decided in favour of the Assessee
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