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2020 (12) TMI 74 - AT - Income TaxIncome accrued in India - Royalty receipt - Fees for Technical Services on accrual basis - A.O. noticed that the assessee has not offered the same as income - assessee is a company incorporated and operating in Germany - India has entered into a Double Taxation Avoidance Treaty with Federal Germany Republic - HELD THAT:- As settled proposition of law that the DTAA provisions shall override the Income tax provisions unless the provisions of Income tax Act is beneficial to the assessee. There is merit in the submissions of the assessee that the FTS is taxable only in the year of receipt as per the provisions of DTAA. Accordingly, we are of the view that the tax authorities are not justified in assessing the impugned income on accrual basis. Accordingly, we set aside the order passed by Ld. CIT(A) and direct the A.O. to delete the impugned addition. A.R submission that the impugned income has been offered to tax in the year relevant to the assessment year 2015-16 but no material was placed either before the A.O. or before us to substantiate the above said submission. In fact, the AO has specifically mentioned in the assessment order that the assessee has not proved its submissions - Since the Ld. A.R. also could not also exactly pinpoint with evidence that the impugned income was offered to tax in assessment year 2015-16, he agreed that this fact may be verified by the assessing officer. Accordingly, we restore this issue to the file of A.O. for limited purpose of satisfying himself that the impugned amount has been offered to tax by the assessee in A.Y. 2015-16 or in any other assessment year - Appeal filed by the assessee is treated as allowed.
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