9911796707
TMI Blog2004 (12) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to Indian taxation in terms of article 16(2)(c) of the tax avoidance agreement?" The present reference relates to the assessment years 1985-86 and 1986-87. Briefly stated the facts giving rise to the present reference are as follows: All the respondents-assessees are non-residents working in India for Elitos S.P.A. They claimed before the Assessing Officer that all their cases are covered by the Double Taxation Avoidance Agreement between India and Italy and their respective salaries were not taxable with reference to article 16(2)(c) of the said agreement. According to this article, it was claimed that M/s. Elitos S.P.A. did not have a permanent establishment or fixed base in India. The Income-tax Officer had rejected the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the employer, namely, M/s. Elitos S.P.A., had a permanent establishment and a fixed base in India. O.N.G.C. had collected tax on behalf of M/s. Elitos S.P.A. in respect of the payment made in India. According to him, in view of Explanation 2 to section 9 of the Act the salary paid to the respondents-assessees was liable to tax in India in terms of the Double Taxation Avoidance Agreement. In support of his submission he has relied upon a decision of the Bombay High Court in the case of CIT v. Estienne Andre [2000] 242 ITR 422. We have given our anxious consideration to the plea raised by learned standing counsel and we find that under article 16 of the Double Taxation Avoidance Agreement entered into between India and Italy, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated." From a perusal of the aforesaid article it is seen that all the conditions mentioned in clause (2) of article 16 of the agreement are to be fulfilled in case the salaries, wages and other remunerations derived by the respondents are to be held not liable to tax in India. It is not in dispute that the conditions mentioned in sub-clauses (a) and (b) of clause 2 of article 16 are fulfilled in the present case. So far as the condition mentioned in sub-clause (c) of clause 2 is concerned we find that the Tribunal has recorded a finding that the respondents-assessees had received only 7 per cent, of the amount which be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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