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2009 (9) TMI 565 - HC - Income TaxNon-Resident - principle of res judicata - provision of services at cost to cost basis - The assessee-company was required, vide notice under section 142(1) of the Act, to show cause as to why the receipts be not assessed under section 44BB of the Act. The assessee-company, in its reply, contended that the company has rendered, the service on cost-to-cost basis to EOGIL in terms of the production sharing contract entered into by EOGIL with Indian concerns duly approved by the Government of India and payments received through debit notes are only reimbursement of actual expenses. It was also claimed that the income of the assessee-company is not taxable in India in view of article 7(3) of the Double Taxation Avoidance Agreement (DTAA) with the USA. - Held that: - The assessees have clearly substantiated the fact that there is no element of profit, therefore, in terms of article 7 of the Double Taxation Avoidance Agreement between India and the USA, the assessees cannot be taxed. - questions raised in these appeals are answered in favour of the assessees and against the Revenue
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