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2014 (2) TMI 379

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..... gross interest – As per DTAA between India and UAE - Tax has been defined in Article-2(2)(b) as per which income tax included surcharge - Therefore, tax referred to in Article 11(2) @ 12.5% also includes surcharge and education cess - Decided in favour of assessee. - ITA No. 4400/Mum/2012 - - - Dated:- 1-10-2013 - I.P. BANSAL AND P.M.JAGTAP, JJ. For the Appellant : Milin Thakare. For the Respondent : Smt. Neeraja Pradhan. ORDER:- PER : I.P.BANSAL This is an appeal filed by the assessee. It is directed against the order passed by Ld. CIT(A)-11, Mumbai dated 25/05/2012 for assessment year 2009-10. Grounds of appeal read as under: "The appellant objects to the order dated 25 May 2012 passed by Commissioner of Inc .....

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..... l in para-5. 3. On the other hand, Ld. DR submitted that education cess and secondary and higher secondary education cess are considered to be tax payable even when the tax is determined on the basis of DTAA. For this purpose she relied upon the decision of Hon'ble Uttarakhand High Court in the case of CIT v. Arthusa Offshore Co. [2008] 169 Taxman 484 and decision of Advance Rulling Authority in the case of Airports Authority of India, In re [2008] 299 ITR 102 (AAR - New Delhi). 4. In the rejoinder it was submitted by Ld. AR that after considering both the decisions relied upon by Ld. DR Tribunal has held that education cess and surcharge etc. cannot be levied separately and will be included in the tax rate specified in the DTAA. 5. W .....

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..... siness income, there being specific Article to deal with interest income i.e. Article-Il, taxation of interest will be governed by the said Article-11. Secondly interest income may be taxed in contracting State in which it arises, according to law of that State but if the recipient is beneficial owner of interest, tax so charged shall not exceed 5% of gross interest if the interest is received from bank and in other cases 12.5% bf gross amount of interest. In this case, the assessee is the beneficial owner of interest and tax charged cannot exceed 12.5% of gross interest. Tax has been defined in Article 2(2)(b) as per which income tax included surcharge. Therefore, tax referred to in Article 11(2) @ 12.5 ,6 also includes surcharge. Further, .....

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