TMI Blog1992 (8) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... ding on 31-3-1983 are abstracted below : 1. Property Rent from building at No. 77, Leboh Ampang, Kuala Lumpur : Rs. 17,376 2. Business (a) Net income from M/s. A.K. Muthan Chettiar and Sons, Singapore (own) : Rs. 3,892 (b) 25 per cent share of income from the firm of M/s. A.K. Muthan Chettiar Sons, Kuala Lumpur :Rs. 2,13,568 3. Other Sources (a) Dividend from United Asian Bank, Kaula Lumpur : Rs. 1,728 (b) Net winnings from welfare lottery : Rs. 19,732 (c) Compensation received for vacating the premises at No. 69, Leboh Ampang. Kuala Lumpur : Rs. 67,008 -------------------------- : Rs. 3,23,304 -------------------------- 3. One of the issues that arose for consideration in the proceedings relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri D.V. Jayaraman, the learned counsel for the assessee strongly supported the impugned order of the CIT (Appeals) on the issue under consideration. 7. We have looked into the facts of the case. We have considered the rival submissions. 8. At the outset, we may indicate the plane on which Double Taxation Avoidance Agreements operate and their effect on the assessment of income to Indian income-tax. For determining the total income of an Indian Resident and computing his tax liability, one has to look only to the income-tax Act, 1961. In other words, the income of an Indian Resident must be determined in the ordinary way under the Indian law. This is the first stage. In the second stage, the Double Taxation Avoidance Agreement comes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case before us, the property in question being situated in Kuala Lumpur, it is the Malaysian Government, which is competent to levy tax on the income from property. True, the Article uses the term " may be taxed ". As we see it, the term " may be taxed " has been advisedly used. It is one thing to identify the contracting State which will levy tax on income from immovable property, but it is totally a different thing to say that that contracting State should invariably levy tax on income from immovable property. The choice is with the contracting State in question. Even if that contracting State should decide not to levy any tax on income, it does not follow that the other contracting State gets a right to levy tax on the income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permanent establishment situate therein. In the case before us there is no dispute about the situs of the two enterprises in question. One is situate in Singapore and the other in Malaysia. But the said data is inadequate to decide the exigibility issue under Art. VII. 1. We have no information on the point whether the said two enterprises carry on business in India also through a permanent establishment situate in India. We, therefore, remit this aspect of the matter to the Assessing Officer for fresh consideration and decision after ascertaining whether the aforesaid two enterprises were at the relevant point of time carrying on business in India also through a permanent establishment situate in India. (3) Income under the head ' Othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t circuited the entire matter). Be that as it may, we hold first that the winnings from lottery in question are chargeable to Indian Income-tax ; and secondly, that the assessee would be entitled to the credit contemplated by and under Art. XXII.2 only if he demonstrates that Malaysian tax had been levied on the winnings in question. (C) Compensation for vacating the premises at No. 69, Leboh Ampang, Kuala Lumpur It is common ground that the assessee was a tenant of the aforesaid premises ; that he vacated the said premises ; and that he received a sum of Rs. 67,008 as and by way of compensation. The case before us is clearly one of receipt of certain amount on capital account as compensation for surrendering tenancy right. True, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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