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2017 (12) TMI 1047 - AT - Income TaxAdditions on account of service tax - treated to the income of the assessee company - Held that:- ITAT has already decided these grounds in favour of assessee in [2016 (8) TMI 1311 - ITAT MUMBAI] by holding that the additions on account of service tax cannot be treated to the income of the assessee company. Therefore, respectfully following the decision of the coordinate bench of Hon’ble ITAT in assessee’s own case for AY 2008-09 and 2009-10 and in order to maintain judicial discipline and consistency which are applicable mutatis mutandis in the case of the assessee. We accordingly gave similar directions to the AO as were given by Hon’ble ITAT for verify the claim of the assessee company, and on finding the same in order deleat the addition made in the hands of the assessee company. It is further directed that the AO in the course of verifying the aforesaid claim of the assessee company shall in all fairness afford an opportunity of being heard to the assessee company Levying Surcharge @ 2.5 percent, Education Cess @2% and Secondary and Higher Education Cess @ 1 percent - assessee has offered its income to tax under Article 13 of Double Taxation Avoidance Agreement (DTAA) between India and France at 10 percent - Held that:- We find that the Hon’ble ITAT in [2016 (7) TMI 712 - ITAT MUMBAI] has already decided this grounds in favour of assessee by holding that revenue cannot levy surcharge and education cess, which is also in the nature of surcharge, over and above the cap of 10% prescribed in article 13 as the tax rate for Royalty income. In any case the provision of article 13 of the India-France DTAA r.w.r 2 thereof would prevail over the provision of the domestic Income Tax law and thus the tax liability on royalty income shall be capped at 10%. Therefore, respectfully following the decision of the coordinate bench of Hon’ble ITAT and in order to maintain judicial discipline and consistency which are applicable mutatis mutandis in the case of the assessee. We accordingly gave similar directions to the AO as were given by Hon’ble ITAT to recompute the tax liability on royalty income accordingly. Thus this ground so raised by the assessee company is allowed
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