TMI Blog2010 (9) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... st - While coming to this conclusion the provisions of section 209(1)(d) were duly considered and the reliance was placed on the Special Bench order in the case of Motorola Inc. Vs. DCIT [2005 -TMI - 63055] - the learned CIT(A) has rightly held that the interest under sections 234B and 234C is not payable by the non-residents whose total income is subject to deduction of tax at source – Appeal is dismissed - ITA No. 3860/Mum/08 - - - Dated:- 30-9-2010 - R.K.PANDA ACCOUNTANT MEMBER J. N.V.VASUDEVAN JUDICIAL MEMBER J. Appellant by : Shri Keshav Sexena Respondent by : Shri Farrokh Irani ORDER PER N.V.VASUDEVAN, J.M, This is an appeal by the revenue against the order dated 28/3/2008 of CIT(A) XXXIII, Mumbai relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of 10% as per Article 12 of the DTAA, being more favourable than the domestic tax rate. Article 12 of the Indo-German DTAA reads as follows: ARTICLE 12 - Royalties and fees for technical services 1. Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, or fees for technical services, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties or the fees for technical ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time being in force, of the Government of India, the agreement is in accordance with that policy, then, subject to the provisions of sub-sections (1A) and (2), the income-tax payable shall be the aggregate of, - (A) The amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of thirty per cent if such royalty is received in pursuance of an agreement made on or before the 31st day of May, 1997, and twenty per cent where such royalty is received in pursuance of an agreement made after the 31st day of May, 1997; 6. We have already seen that the term resident of a Contracting State is defined under Article 4 of the DTAA between India and German as under: means any person w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the taxation laws in force in the respective states. 5. The AO (DDIT) in passing the assessment order has relied on the assessment order for Assessment years 2002-03 and 2004-05 wherein the then Assessing Officer has made a reference to the OECD Commentary on The Application of the OECD Model Tax Convention to Partnership published as Publication No.6 under Issues in International Taxation. He reproduced the table relating to the taxation of Partnership firms in Germany given at Annexure III of the OECD commentary and on the basis concluded that the provisions of the DTAA between India and Germany would not be applicable to the assessee. The AO was of the view that the assessee was not liable to tax in Germany and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the impugned order on this issue. We, therefore, uphold the same and dismiss the ground of the Revenue s appeal. 9. The last ground is against the charging of interest under section 234B and 234C. Here again it is noticed that similar issue was raised in assessment year 2002-03 and the Tribunal, by the aforesaid order, has come to the conclusion that the levy of interest u/s. 234B was not valid. While coming to this conclusion the provisions of section 209(1)(d) were duly considered and the reliance was placed on the Special Bench order in the case of Motorola Inc. Vs. DCIT [(2005) 95 ITD 269 (Del) (SB)]. As the facts and circumstances of the instant year are mutatis mutandis similar to those of the preceding year, in our consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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