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2021 (12) TMI 1359 - AT - Income Tax


Issues Involved:
1. Assessment order passed under Section 144C(13) r.w.s. 143(3) for A.Y. 2014-15.
2. Treatment of distribution revenue as royalty under Section 9(i)(vi) and DTAA.
3. Classification of Turner International India Private Limited (TIIPL) as Permanent Establishment.
4. Taxation of distribution revenue under Article 7 of DTAA instead of royalty.
5. Disregarding resolution on taxability of distribution revenue as business profits.
6. Non-allowance of credit for tax deducted at source.
7. Initiation of penalty proceedings under section 271(1)(c) of the Act.

Detailed Analysis:
1. The appeal challenges the assessment order for A.Y. 2014-15 under Section 144C(13) r.w.s. 143(3) of the Income-tax Act, 1961.
2. Grounds 2 to 5 contest the treatment of distribution revenue as royalty under Section 9(i)(vi) and DTAA. The Tribunal referred to past decisions favoring the assessee and directed the AO to delete the additions.
3. The issue of TIIPL being treated as a Permanent Establishment under Article 5(4) of the DTAA was raised. The Tribunal ruled in favor of the assessee based on previous decisions.
4. Regarding the taxation of distribution revenue, the Tribunal directed the AO to tax it under Article 7 of the DTAA instead of royalty, in line with Article 12(6) of the DTAA.
5. The Tribunal dismissed the contention of disregarding the resolution on taxability of distribution revenue as business profits, following past decisions in favor of the assessee.
6. Ground 6 pertained to the non-allowance of credit for tax deducted at source. The Tribunal directed the AO to consider and allow the claim if found correct.
7. Ground 7 addressed the non-allowance of credit for taxes deducted at source wrongly withheld. The Tribunal upheld the denial of credit as the revenue was not taxable in India as per Section 9 of the Act.

This detailed analysis covers the various issues raised in the appeal and the Tribunal's decisions on each ground, providing a comprehensive overview of the judgment.

 

 

 

 

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