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2020 (10) TMI 1188 - AT - Income TaxIncome accrued in India - taxing the receipts from TCL as 'Royalty' under Section 9(1)(vi) of the Act as well as Article 13(3)(a) of the India-UK Tax Treaty - HELD THAT:- As decided in own case [2018 (12) TMI 1321 - ITAT MUMBAI] the amounts received by the assessee from TCL for providing Satellite Telecommunication Services is not to be held as royalty in its hands. The Grounds of appeal Nos. 2 to 5 are allowed in terms of our aforesaid observations. PE in India - Liaison Office (LO) of the assessee constituted its PE in India and that the Land Earth Stations (LES) constituted a PE of the assessee in India - HELD THAT:- A.O/DRP had in the aforesaid preceding years concluded that the LO and LES were to be treated as the PE on the assessee in India, remains the same, as are involved in the appeal of the assessee for the year under consideration, we therefore respectfully follow the aforesaid order of the Tribunal. Accordingly, in the backdrop of our aforesaid observations, we herein conclude that the assessee did not have any PE in India during the year under consideration. The Grounds of appeal Nos. 6 & 7 are allowed in terms of our aforesaid observations. Computing of the income of the assessee attributable to its PE in India - profitability on an adhoc basis at 30% of its gross receipts from TCL by applying Rule 10 of the Income Tax Rules, 1962 - HELD THAT:- Since we have upheld the primary stand of the assessee that there does not exist any PE of the assessee in India, thus, the dispute in Ground of appeal No. 8 having been rendered as merely academic is dismissed as infructuos. A.O levying surcharge, secondary education cess and higher secondary education cess over and above the tax computed at the rate prescribed under the India-U.K. tax treaty on the receipts of the assessee while calculating its income tax liability for the year under consideration - HELD THAT:- Tax computed at the rate prescribed under the India-U.K. tax treaty is not be subjected to any additional taxes in the form of surcharge or education cess. We thus set aside the view taken by the lower authorities and direct the A.O to recompute the tax liability of the assessee in terms of our aforesaid observations. The Ground of appeal No. 9 is allowed. Granting TDS credit - HELD THAT:- As the adjudication of the said issue would require verification of the records, we therefore, restore the matter to the file of the A.O to verify the factual position. In case there is a short credit of TDS allowed to the assessee, then the credit for the balance amount shall be allowed by the A.O, as per law. Ground of appeal No. 10 is allowed for statistical purpose.
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