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2019 (7) TMI 363 - AT - Income TaxApplicability of surcharge and cess on DTAA rate of tax - rectification u/s 154 - assessee being foreign company received Royalty and Fees for Technical Services (FTS) after TDS @ 10% - filed return claiming DTAA benefit - AO applied tax as per Income tax Act - assessee filed rectification wherein tax rate was corrected but retain levy of surcharge and education cess - as per DTAA between India and Netherlands, the income tax including surcharge shall not exceed 10% - education cess is surcharge or not HELD THAT:- The DTAA clearly provided that the taxes in India means the income tax including surcharge there as pointed out by the Learned Counsel for the Assessee. Further, clause 11 of the Finance Act 2018 clearly explains that the education cess is nothing but additional surcharge. In the case of J.P. Morgan Securities Asia (P.) Ltd, [2013 (10) TMI 1518 - ITAT MUMBAI] the coordinate Bench of this Tribunal was considering the provisions of DTAA between India and Singapore wherein similar adjustment was made by the A.O. and the Tribunal has held that tax payable under DTAA is inclusive of surcharge and education cess. Respectfully following the same, we hold that the A.O. cannot charge surcharge and education cess over and above 10% of the Income Tax levied on the assessee. Appeals of the assessee are accordingly allowed and the A.O. is directed to delete the adjustments made on account of the education cess and surcharge levied on the assessee for all the four assessment years. - all the appeals of the assessee are allowed.
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