TMI Blog2008 (11) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... sions have been contained in this regard in both the treaties. The ld CIT(A) has accepted the assessee's contention that the amount of TDS in UK and USA constitutes 17.42 per cent of the gross professional fees received by the assessee and the average rate of tax on her gross total income for the assessment year under consideration comes to 30 per cent under the provisions of the IT Act, 1961. Even if we consider the claim of deduction u/s. 80RR at 15 per cent of the professional income derived by the assessee in exercise of her profession abroad, the proportionate rate of Indian tax on such income remains at a still higher level. No contradiction has been pointed out by the ld DR in this working. When art. 24(2) of DTAA between I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the provisions of s. 90 were applicable and hence the assessee was entitled to the credit of TDS abroad to the extent it was relatable to the year in question amounting to Rs. 49,19,743. 3. The first grievance of the Revenue is on the granting of relief by the learned CIT(A) in proceedings under s. 154 with reference to a debatable issue. Then on merits the Department is aggrieved with the allowing of credit of TDS amounting to Rs. 49,19,743 deducted in UK and USA on the income which was offered by the assessee in her return of income. 4. The learned Departmental Representative contended that the learned CIT(A) was not justified in law on adjudicating the issue on merits for the reason that the matter was debatable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice infra that the issue was not at all debatable or capable of having two views. 5. On merits it is observed that the assessee earned income of Rs. 16.24 crores which included the professional receipts from UK as well as USA. It is an undisputed fact that the income on which tax was deducted in these two countries was duly included in the total income. Now the question which remains for adjudication is to examine whether the assessee is entitled to the credit for TDS on such foreign income. Sec. 5 provides for inclusion of all income by a resident from whatever source derived which is received or is deemed to be received in India or accrues or arises or is deemed to accrue or arise in India or accrues or arises to him outside India durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f DTAA between India and UK provides as under: "Subject to the provisions of the law of India regarding the allowance to the credit against Indian tax paid in a territory outside India (which shall not affect the general principle hereof), the amount of the UK tax paid, under the laws of the UK and in accordance with the provisions of the this convention, whether directly or by deduction, by a resident of India, in respect of income from sources within the UK which has been subjected to tax both in India and by UK shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax." 7. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise of her profession abroad, the proportionate rate of Indian tax on such income remains at a still higher level. No contradiction has been pointed out by the learned Departmental Representative in this working. In view of the patent language of the relevant articles, as reproduced above, it becomes abundantly clear that the assessee was entitled to the credit for TDS on foreign income, which income was duly offered for taxation in India. We hardly find any debate or dispute on the allowing of such credit which could preclude the assessee from moving application for rectification before the AO under s. 154 of the Act. We, therefore, uphold the view taken by the learned CIT(A). 9. In the result, the appeal is dismissed. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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