TMI Blog2020 (10) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... or Fees for Technical Services - tax payable on royalty income received in pursuance of agreement entered into on or after 01.06.2005 and provisions of Article 12 of the Indo-US DTAA for computing the tax payable on royalty income received in pursuance of agreements entered into on or before 01.06.2005 - HELD THAT:- The contracts or agreements being source of income had been entered into on different dates and the statute recognizes such differentiation and provides for separate tax rates for each stream. Therefore, the tax on royalty income cannot be levied on an aggregate basis and taxability of royalty under sub- clauses (A), (AB), (BB) and (C) of Section 115(a)(b) are separate and distinct. The assessee therefore can compute tax at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SURYANARAYANA, A/W Ms. MAHIMA GOUD, ADVS. JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Mr.T.Suryanarayana, learned counsel along with Smt.Mahima Goud, learned counsel for the respondent. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act', for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment Year 2007-08. The appeal was admitted by a Bench of this Court vide order dated 19.02.2013 to consider the following substantial questions of law: 1. Whether the Tribunal was correct in holding that the assessee is entitled to adopt provisions of Section 115A(1)(b)(AA) of the Act for computing the tax payable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Tribunal. The Tribunal, by order dated 13.04.2012, inter alia, held that the income received by the assessee by virtue of different agreements cannot be bifurcated for the purpose of computation of total income and held that the rates prevailing during different periods under the DTAA and under Section 115A of the Act which are more beneficial to the assessee, have to be applied. The Tribunal deleted the levy of interest under Section 234B of the Act on the ground that the non-resident assessee was not liable for payment of advance tax. In the aforesaid factual background, this appeal has been filed. 4. Learned counsel for the revenue, at the outset, fairly submitted that the 2nd substantial question of law has already been answere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are independent of each other and create or provide for a charge of income tax under Section 4 of the Act. Therefore, a foreign company has to compute tax on its income under each of the above sub-clauses separately and the tax so computed has to be segregated as per the mandate of Section 115A(a)(b) which provides that the income tax payable shall be the aggregate of. The aforesaid expression which provides for aggregation of tax computed under each of sub-clauses (A), (AA), (B), (BB), (C) indicate that the charge of tax provided under the aforesaid clauses are separate and distinct. In this connection, reference may be made to the decision of the Supreme Court in 'UNION OF INDIA Vs. AZADI BACHAO ANDOLAN' (2003) 263 ITR 706 (SC). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of tax in case of a non-resident taxpayer where the total income includes any income by way of Royalty and Fees for technical services (FTS) received under an agreement entered after 31.03.1976 and which are not effectively connected with permanent establishment, if any, of the non- resident in India. Prior to amendment of section 115A by the Act, the tax was payable on the gross amount of income at the rate of - (i) 30% if income by way of royalty or FTS is received in pursuance of an agreement entered on or before 31.05.1997 (ii) 20% if income by way of royalty or FTS is received in pursuance of an agreement entered after 31.05.1997 but before 01.06.2005; and (iii) 10% if income by way of royalty or FTS is received in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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