9911796707
TMI Blog2016 (9) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... JM This is an appeal preferred by the revenue against the order of the learned CIT(A)-2, Bhopal, dated 21.4.2015. 2. The sole issue involved in this appeal is that the learned CIT(A) was not justified in allowing the appeal of the assessee stating that taxes paid to the tune of ₹ 28,54,425/- is allowable as credit as per Article 10 24 of the DTAA. 3. Short facts of the case are that the assessee is engaged in the business of manufacturing of detergent bar and powder to be supplied to Hindustan Lever Ltd. It has manufacturing units at Dhule and two units at Baddi. Deduction u/s 80IC of the Act has been claimed at ₹ 30,18,400/- in respect of Unit-1 at Baddi as per return filed declaring income of ₹ 2,69,85,362/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases, Article 24 of DTAA provides for giving credit for tax deducted in the contracting state and therefore the appellant company is entitled to claim credit of tax inside India in respect of tax deducted as withholding tax in Srilanka. From the TDS certificate filed by the appellant along with the tax challan, it is seen that the gross dividend paid by the Srilankan subsidiary in Srilankan Rupees is 1,20,05,202/- on which 10% of the tax has been deducted in Srilankan Rupees ₹ 10,91,382/- which is equivalent to Indian ₹ 4,76,498/-. The appellant is thus allowed credit for taxes paid in Srilanka as per Article 24 of DTAA to the extent of ₹ 4,76,498/-. In this regard I drew strength from the following judgments :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions of such agreement cannot fasten a liability where the liability is not imposed by a local Act. Where tax liabililty is imposed by the Act, the agreement may be resorted to either for reducing the tax liability or altogether avoiding the tax liqability. In case of any conflict between the provisions of the agreement and the Act, the provisions of the agreement would prevail over the Act in view of the provisions of section 90(2). Section 90(2) makes it clear that WHERE THE Central Govt. has entered into an agreement with the Government of any country outside India for granting relief of tax or for avoidance of double taxation then in relation to the assessee to whom suchb agreement applied, the provisions of the Act shall ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain on other properties and other income) which provide that such income may be taxed in both the contracting states. For example, Para (2) provides that dividend income may be taxed in othe contracting states while para (2) provides that dividend income may also be taxed in the state of residence. Thus, if the income is taxed in both the countries then the country of residence will get credit of the tax paid in the country. In the instant case the taxes paid amounting to ₹ 4,76,498/- on the said dividend income is allowed as credit in the year under consideration in view of Article 10 and 24 of DTAA between India and Srilanka. Thus the ground of the appellant is allowed. 4.3 Keeping in view above and facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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