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2017 (8) TMI 233 - AT - Income TaxPenalty under section 271(1)(c) - taxability of the assessee in India partially - DTAA effect - Held that:- The explanation of the assessee was that being a tax resident of UK it had opted to be taxed in India under the provisions of the India-UK Double Taxation Avoidance Agreement (Tax Treaty) for the previous year relevant to the assessment year under consideration. It was explained that under the provisions of the Tax Treaty, income derived by it from supply of network equipment to Indian customers qualify as "business profits" and, therefore, not liable to taxation in India under the provisions of article 7(1) of the Tax Treaty in the absence of a permanent establishment of the assessee in India. The assessee did not offer the revenue from supply of network equipment to tax in India. It was a debatable issue hence failure to voluntarily file return of income under the above bona fide belief cannot be construed to be concealment of income and furnishing inaccurate particulars of income by the taxpayer. Also because the learned Commissioner of Income-tax (Appeals) and the Tribunal upheld the taxability of the assessee in India partially cannot lead to an inference that the assessee had furnished inaccurate particulars of income. - Decided in favour of assessee.
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