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TMI Blog2013 (7) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... on-deduction is given under section 201, the question of levy of interest under section 234B on the assessee did not arise - Following decision of Director of Income-tax v. Jacabs Civil Incorporated [2010 (8) TMI 37 - DELHI HIGH COURT] and CIT v. Madras Fertilizers Ltd. [1983 (9) TMI 74 - MADRAS High Court] - Decided against the Revenue. - - - - - Dated:- 26-7-2011 - CHITRA VENKATARAMAN MRS., JAICHANDREN M., JJ. JUDGMENT The judgment of the court was delivered by Mrs. Chitra Venkataraman J.-These tax cases (appeals) have been filed by the Revenue as against the common order of the Tribunal relating to the two assessment years, viz., 1991-92 and 1994-95, by raising the following substantial question of law : "Whether, on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal pointed out that in a case of a foreign company, no advance tax was required to be paid under section 209 of the Income-tax Act. Thus, on the dismissal of the appeals before the Tribunal, the Revenue has come before this court. Tax Case Appeal No. 218 of 2005 relates to the assessment year 1991-92. While passing the assessment under section 143(3) of the Income-tax Act, the contention of the assessee that the receipt was towards technical service, was, however, rejected and the same was treated as royalty. The assessee's income was, however, assessed at 20 per cent. in terms of article VII-A(ii) of the Double Taxation Avoidance Agreement. The Assessing Officer pointed out that since the company is a foreign company, not liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 1991-92 and 1994-95, since the advance tax paid was less than 90 per cent. of the assessed tax, the assessee was liable to pay interest under section 234B of the Income-tax Act. The question with regard to rate of tax as to whether it should be 30 per cent. as applicable to royalty or 20 per cent. on the technical know-how fees came up for consideration before this court in the assessee's own case reported in CIT v. Reiter Ingolsteadt Spinnereimaschinenbau AG [2006] 285 ITR 199 (Mad). This related to the assessment year 1993-94 and 1994-95. This court held that the entire payment receipt, received by the foreign company, constituted fees on technical know-how, hence, taxable at 20 per cent. as per the Double Taxation Avoidan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax (Appeals) and the Income-tax Appellate Tribunal took the view that the question of the assessee herein as liable to pay advance tax did not arise and consequently, the question of invoking the penal provision under section 234B of the Income-tax Act did not arise on the facts. Learned counsel appearing for the assessee placed reliance on the decision reported in Director of Income-tax v. Jacabs Civil Incorporated [2011] 330 ITR 578 (Delhi) rendered by the Delhi High Court, which considered the levy of interest in a case of a non-resident where there was no liability to pay advance tax. The Delhi High Court pointed out that when there was 100 per cent. deduction of tax at source and there being no liability to pay any advance tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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