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2023 (11) TMI 504 - AT - Income TaxIndian resident deriving foreign income - interpretation of the expression “may be taxed” - taxability of particular income in both the contracting states - addition under the head income from house property in respect of rental income received from two properties situated in Australia - whether as per Article 6 of DTAA such income is taxable in Australia and not in India? - rental income from Australian property was not included in the Indian income tax return in view of Article 6 of DTAA and in respect of the rental income, tax of 4698.16 Australian dollars was paid in the income tax return filed in Australia - HELD THAT:- The issue of interpretation of phrase “may be taxed in other contracting States”, as used in different Articles including Article 7 in the DTAA has been discussed in detailed by the Tribunal in Essar Oil Ltd. [2013 (9) TMI 126 - ITAT MUMBAI] after taking into consideration various decisions of the High Court, Supreme Court, effect of amendment in section 90(3) and notification dated 28th August 2008, issued by the Central Government. DR in addition to the judgment relied upon by the ld. AO and that of the ld. CIT(A) has also relied upon the judgment of the Bank of India Vs. ACIT [2020 (12) TMI 862 - ITAT MUMBAI] wherein the judgment and circular relied upon by the ld. AR of the assessee is discussed at length and even though the decision is given in the favour of the revenue by holding that as a result of the amendment w.e.f. 01.04.2004 by which section 3 to section 90 has been brought to tax in the statute from the assessment year 2004-05 there is a clear departure from the earlier position wherein the courts have interpreted the expression “may be taxed” in as much as now the central government which is one of the contracting state has been empowered to assign meaning to the various terms and expressions and used in the agreement. Once the tax is payable or paid in the country of source, then country of residence is denied of the right to levy tax on such income or the said income cannot be included in return of income filed in India, would no longer apply after the insertion of provision of sub-section (3) of section 90 w.e.f. 1st April, 2004, i.e. Assessment Year 2004-05. Based on these finding we see no reasons to interfere with the finding of the lower authority and therefore, we see no merits in the appeal of the assessee and the same is dismissed.
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