Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2006 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (1) TMI 96 - HC - Income TaxCollaboration agreement entered into between the two companies - down payments were made in three instalments. - dispute is regarding the rate of tax applicable. - Contention of the assessee is that these down payments are in the nature of technical know-how fees and therefore, to be taxed at 20 per cent - AO stated that the down payments are in the nature of lump sum payment attracting section 9(1)(vi), wherein it is stated that the lump sum payments are to be treated as royalty and therefore, to be taxed at 30 per cent, and not at 20 per cent, - "Whether Tribunal was right in holding that the lump sum payment made to the assessee foreign company was taxable at the rate of 20 per cent, relying on the exchange of notes of 1984 and not considering the terms of the Double Taxation Avoidance Agreement with Germany and especially, articles 12(3) and 12(4) of the said Agreement and the definition of 'royalty' under the Income-tax Act?" - held that the gross receipts by the assessee, whether termed as royalties or fees for technical services, should be taxed at 20 per cent.
|