TMI Blog2008 (2) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... an issue which was not raised by the assessee either before the AO or before the CIT(A) but was raised for the first time before the Tribunal and that too in an appeal filed by the Department? Whether the Tribunal having dismissed the cross objection filed by the assessee was justified in then proceeding to decide the issue raised by the assessee on merits in their favour? Held that:- The point involved in these appeals stands concluded in favour of the assessee and against the revenue by the decision of the Madras High Court in CIT vs. VR. S.R.M. Firm & Ors. [1994 (3) TMI 71 - MADRAS High Court] which was duly affirmed by this Court in the case of CIT vs. P.V.A.L. Kulandagan Chettiar (Dead) Through LRs [2004 (5) TMI 8 - SUPREME Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the aforesaid Malaysian company. 3. Being aggrieved, assessee filed an appeal before the CIT(A) which was accepted. Revenue thereafter filed appeal before the Income-tax Appellate Tribunal (for short 'the Tribunal'). The Tribunal disposed of the appeal with the observation that Double Taxation Avoidance Agreement (for short 'DTAA') entered into by the Government of India with the Government of Malaysia would override the provisions of the Act if they are at variance from the provisions of the Act. It was held that from a plain reading of art. 11 of the DTAA, it was clear that dividend income would be taxed only in the contracting states where such income accrued. 4. Aggrieved by the order of the Tribunal, the Department filed fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om a company in Malaysia is not liable to be taxed in the hands of the assessee in India under any of the provisions of the Act. Accordingly, the High Court has answered question No. 1 in favour of the assessee and against the Department. 6. Insofar as question No. 2 is concerned, counsel for the assessee conceded that tax under s. 5(1)(c) of the IT Act would have been exigible but under art. 11 of DTAA entered into between India and Malaysia, tax is liable to be levied in the country where the income had accrued. Under these circumstances the Court held that this question as to whether income of an assessee accrued outside the country could be taxed within the country under the provisions of s. 5(1)(c) of the Act did not arise from the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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