TMI Blog2006 (1) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... at the lump sum payment made to the assessee foreign company was taxable at the rate of 20 per cent, relying on the exchange of notes of 1984 and not considering the terms of the Double Taxation Avoidance Agreement with Germany and especially, articles 12(3) and 12(4) of the said Agreement and the definition of 'royalty' under the Income-tax Act?" - held that the gross receipts by the assessee, whether termed as royalties or fees for technical services, should be taxed at 20 per cent. - - - - - Dated:- 21-1-2006 - Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J. - The above tax case appeals are directed against the order of the Income-tax Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... went on appeal before the Commissioner of Income-tax (Appeals). For the assessment year 1993-94, the Commissioner of Income-tax (Appeals) allowed the appeal by following his own order in the assessee's own case held in I.T.A. No. 409-C/97-98 dated August 31, 1998. For the assessment year 1994-95, the Commissioner of Income-tax (Appeals) allowed the appeal by elaborately discussing the Double Taxation Avoidance Agreement as well as the exchange of Notes and held that since the technical services were rendered outside India, the present payments, whether termed as royalties or fees for technical services will be taxed at 20 per cent, of the gross amount of the payments. The said findings of the Commissioner of Income-tax (Appeals) were also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich reads as follows: "It is understood that the taxation of royalty income as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process or trade mark, or similar property, shall not exceed 20 per cent, of the gross amount of such payments." Applying the above exchange of notes as well as the provisions of the Double Taxation Avoidance Agreement, the Commissioner of Income-tax (Appeals) and the Tribunal have held that the gross receipts by the assessee, whether termed as royalties or fees for technical services, should be taxed at 20 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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