TMI Blog2004 (12) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case as it is covered by the Double Taxation Avoidance Agreement and in view of section 90 of the Act it would have an overriding effect. In view of the foregoing discussion, we answer the question referred to us in the affirmative, i.e., in favour of the assessees and against the Revenue - - - - - Dated:- 23-12-2004 - Judge(s) : R. K. AGRAWAL., VIKRAM NATH. JUDGMENT The Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for opinion to this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right to hold that the expenditure in question on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of article 5(1). It had held that the remuneration of the employees in question is not borne by the permanent establishment or fixed place which the employer had in India. The salaries to the non-resident technicians were paid in Italy and hence the same were not borne by the permanent establishment in India and, therefore, the respondents-assessees were not exigible to Indian taxation in terms of article 16(2)(c) of the Double Taxation Avoidance Agreement. It had also rejected the plea that the tax collected from O.N.G.C. on behalf of M/s. Elitos S.P.A., the employer company as a taxable perquisite in the hands of the employees under section 17(2)(iv) of the Act. We have heard Sri Shambhoo Chopra, learned standing counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. (2) Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerning; and (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. (3) Notwithstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the permanent establishment in India. In the case of Estienne Andre [2000] 242 ITR 422 (Bom) which has been relied on by learned standing counsel, the Bombay High Court had dismissed the reference application made under section 256(2) of the Act on the ground that no question of law arose out of the order of the Tribunal granting relief under the Double Taxation Avoidance Agreement between India and France. The aforesaid decision is of no assistance. It may be mentioned here that under section 90 of the Act the Central Government has been empowered to enter into an agreement with the Government of any country outside India for granting relief for the avoidance of double taxation of income under this Act and under the corresponding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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