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2012 (5) TMI 345 - AAR - Income TaxWhether payments made to the applicant (a company based in Germany), in terms of the Cost Allocation Agreement, can be treated as income in the hands of the applicant and whether it is not merely a reimbursement of the expenses incurred for the Research and Development. - held that:- The theory of reimbursement propounded cannot stand. - The payment occurs only when the process or scientific experience is used by a member. It is not a sharing of costs or reimbursement of a part of the expenses incurred for the research as and when it is completed. Since it is a payment for use and the payment depends solely on use, the payment can be understood only as royalty. Royalty income liable to be taxed in India under Article 12.2 of the DTAC between India and Germany.
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