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TMI Blog2013 (8) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... al Rao (Judicial Member) This appeal by the Revenue is directed against the order dated 30.11.2011 for the assessment year 2007-08. 2. The only ground raised by the Revenue is as under: "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to tax the interest on Income Tax refund at a lower rate 10% as provided in the DTAA between India and Japan w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of this Tribunal in case of Clough Engineering Ltd. Vs ACIT 130 ITD 137 and directed the AO to tax the interest on Income Tax refund at lower rate as provided in the DTAA. 4. We have heard the Ld. DR as well as Ld. AR and considered the relevant material on record. At the outset we note that the issue is covered by the decision of Special Bench of this Tribunal in case of ACIT Vs Clough Enginee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is defined in detail in I.R.C. Sec.864(c) whereas "attributable", though used in US domestic tax law as well, is not defined. If US MC were to refer to "effectively connected", the question would arise whether that term would be required by Article 3(2) MC to be interpreted on the US side in accordance with its definition under US tax law, Use of the term "attributable" avoids that problem and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to the expression "effectively connected" in the light of the commentary by Klaus Vogel, referred to above, then the case of the Assessee would stand squarely covered in favour of the Assessee by the decision of the Special Bench in the case of Clough Engineering Ltd. (supra). Following the same, we hold that the interest income on income tax refund is to be charged to tax only under Article 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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