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2004 (12) TMI 26 - HC - Income Tax"Whether Tribunal was right to hold that the expenditure in question on payment of salaries was not borne by the permanent establishment in India and so the employee in question would not be exigible to Indian taxation in terms of article 16(2)(c) of the tax avoidance agreement?" - expenses on salaries were not borne by the permanent establishment or fixed base in India, the provisions of clause 2 of article 16 of the Double Taxation Avoidance Agreement come into play and, therefore, the salary received by the respondents-assessees is not liable to tax in India. Explanation 2 to section 9 of the Act was not attracted in the present case as it is covered by the Double Taxation Avoidance Agreement and in view of section 90 of the Act it would have an overriding effect. In view of the foregoing discussion, we answer the question referred to us in the affirmative, i.e., in favour of the assessees and against the Revenue
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