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2016 (7) TMI 712 - AT - Income TaxGuarantee commission receipt - taxability in India - Held that:- As decided in assessee;s own case for Assessment Year 2009-10 guarantee commission earned by the assessee from the two associate Indian concerns cannot be held to be taxable in India. - Decided in favour of assessee. Surcharge and education cess is payable in addition to tax of 10% payable on royalty income - Held that:- Since clause (1) of Article 2 provides that the taxes governed would include taxes and surcharge thereon, we find no reason for the Revenue to levy the surcharge and education cess, which is also in the nature of surcharge, over and above the cap of 10% prescribed in Article 13 as the tax rate for royalty income. In any case, the provisions of Article 13 of the India-France DTAA, prescribing a cap of 10% on the rate of tax, read with Article 2 thereof would prevail over the provisions of the domestic income-tax law and thus the tax liability on royalty income shall be capped at 10%. The aforesaid plea of the assessee, in our view, is clearly in tune with the phraseology of the India-France DTAA and is fully supported by the precedents cited before us. As a consequence, we direct the Assessing Officer to re-compute the tax liability on royalty income accordingly. - Decided in favour of assessee.
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