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2017 (1) TMI 1208 - AT - Income TaxEligibility of assessee for benefit of DTAA between India and UAE - income was wrongly assessed as Royalty u/s 9(1)(vi) - Held that:- assessee-company was eligible for the benefits of DTAA between India and UAE and that in view of the provisions of Sec. 90(2) of the Act, it was open for the assessee-company to chose between the taxation as per the India-UAE DTAA or as per the Act, whichever was more beneficial to it. - Decided in favour of assessee. Application of Sec. 44BB of the Act in order to compute assessee’s tax liability - Held that:- Insofar as the earnings from M/s. Aracadia Shipping Ltd. is concerned, in our view, the fact-situation clearly brings out that the tug boats have been used in connection with prospecting for or extraction or production of mineral oils. The finding of CIT(A) in this regard is supported by not only the certificate issued by M/s. Aracadia Shipping Ltd., but also by the terms of arrangement of hiring with the said concern. Copies of such arrangements have been placed in the Paper Book at pages 1 to 4. In the absence of any cogent material brought out by the Revenue, we hereby affirm the said finding of CIT(A) and accordingly, Revenue fails on this aspect. In respect to the earnings from M/s. Leigthton Contractors India Pvt. Ltd. for hiring of barge JU-251 following the phraseology of Sec. 44BB of the Act, in our considered opinion, even the earnings from hiring of barge JU-251 to M/s. Leigthton Contractors India Pvt. Ltd. are eligible for assessment u/s 44BB of the Act. In coming to such a conclusion, we are also conscious of the stand of Assessing Officer as manifested in the assessment order for Assessment Year 2008-09, wherein hiring receipts from M/s. Leigthton Contractors India Pvt. Ltd. on account of hire of barge JU-251 in terms of same contract have been accepted to be assessable u/s 44BB of the Act. Therefore, considering the facts and circumstances of the case, we allow the additional Ground raised by assessee that the amount of ₹ 11,77,55,535/- received from M/s. Leigthton Contractors India Pvt. Ltd. is also liable to be taxed in terms of Sec. 44BB of the Act. Thus, assessee succeeds on its additional Ground of appeal. Interest charged u/s 234B - Held that:- Notably, in terms of the judgment of Hon'ble Bombay High Court in the case of DIT(IT) vs. NGC Network Asia LLC (2009 (1) TMI 174 - BOMBAY HIGH COURT ), wherein held that where the duty is cast on the payer of income to deduct tax at source, the failure of the payer to do so would not result in imposition of interest u/s 234B of the Act in the case of the assessee recipient. Thus, following the judgment above the decision of CIT(A) on this aspect is affirmed and accordingly, Revenue fails on this aspect.
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