TMI Blog2013 (10) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... t levy of Surcharge and Cess is a mandatory simple mechanical and compulsorily levy in all the tax paying cases. 2. The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the Assessing Officer restored. 3. The assessee is a tax resident of Singapore and claim benefit under DTAA between India and Singapore in the return of income. The assessee offered interest income to the tax as 15% as per the provisions of Article 11(2)(b) of DTAA between India and Singapore. The AO, while processing the assessment u/s 143(1) levied Surcharge and education cess on the interest income. The assessee challenged the action of the AO before the CIT(A). The CIT(A) deleted the Surcharge and education cess on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas interest income by Article-Il. Under para-7 of Article-7 where business profit includes items of income which are dealt with separately in any other Article of the agreement, provisions of those Articles should not be affected by the provisions of this Article. In other words, in case there is provision for dealing with a particular type of income, such type of income has to be dealt with by those provisions. Therefore, though interest income may have been assessed as business income, there being specific Article to deal with interest income i.e. Article-11, taxation of interest will be governed by the said Article-11. Secondly interest income may be taxed in contracting State in which it arises, according to law of that State but i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in India. The high Court was not concerned with taxability of interest income as per the treaty. 5.1 In view of the fore-going discussion, we hold that tax payable @ 12.5% under Article 11(2) of FTAA is inclusive of surcharge and education cess. We, therefore, set aside the order of CIT(A) and allow the claim of the assessee. 5. We further note that an identical issue has also been considered and decided by the Kolkata Benches of this Tribunal in case of DIC Asia Pacific Pte. Ltd. Vs ADIT (International Taxation) 52 SOT 447. The Tribunal in case of Sunil V. Motiani Vs ITO has considered the decision of Kolkata Benches of the Tribunal in case of DIC Asia Pacific Pte. Ltd. Vs ADIT (supra). Accordingly, following the orders of this T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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