Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 626 - AT - Income TaxRate of tax at which the amount received as Royalty to be charged to tax - Held that:- As against the assessee’s claim of taxability of royalty income at the rate of 10.5060% u/s.115A(1)(b), the Revenue has charged such income at 20% under the DTAA. Both the sides are in agreement that the facts and circumstances of this appeal are mutatis mutandis similar to those of the preceding year. Following the view taken hereinabove, we hold that the royalty income earned by the assessee from its Indian Associated Enterprises, pursuant to an agreement dated 01-04-2008, should be charged to tax at 10.5060%. Determining the correct amount of income chargeable to tax - guarantee fee not approved by the Reserve Bank of India (RBI) not be charged to tax in the hands of the assessee - claim of the assessee is that the RBI accorded approval for a sum of ₹ 17.99 lakhs after the filing of return and conclusion of assessment and hence, necessary relief should be given - Held that:- It goes without saying that, if a particular sum is not and cannot be lawfully received by the assessee, the same cannot be charged to tax. However, before allowing any such reduction in income, it is essential to verify that the full amount of ₹ 25.39 lakh was offered for taxation at the first instance. Since the facts have not been examined by the authorities below, we are of the considered opinion that, it would be in the fitness of things if the AO is directed to verify the inclusion of ₹ 25.39 lakh in the income of the assessee as guarantee fee; granting of approval by the RBI in respect of this amount only for ₹ 17.99 lakh; and eventual receipt of lower sum of ₹ 17.99 lakh. In case, it is found that the assessee included guarantee fee of ₹ 25.39 lakhs in his total income and further the RBI did not accord approval for a sum of ₹ 7.40 lakh, which was not received also, then the said sum of ₹ 7.40 lakhs should be reduced from the total income of the assessee. Needless to say, the assessee will be accorded an opportunity of hearing in determining such issue.
|