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TMI Blog2004 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... laim relief under the agreement does not accord with the terms of the agreement and the language employed in article XIV(2)(c) of the agreement. - As the applicant-assessee is claiming benefit under an exception (exemption) provision, it will be upon the assessee to discharge the onus to show that it is subject to Austrian tax. - - - - - Dated:- 25-11-2004 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The following two questions of law have been referred to the court for opinion by the Income-tax Appellate Tribunal, Ahmedabad Bench "A", under section 256(1) of the Income-tax Act, 1961 (the Act): "1. Whether, on the facts and in the circumstances of the case, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be taxed in India as the assessee had not been present in India for a period exceeding, in the aggregate, 183 days during the relevant previous year. The Assessing Officer, while framing the assessment on March 27, 1986, negatived the plea on the basis of S. G. Pgnatale [1980] 124 ITR 391 (Guj) a decision in the light of the Explanation inserted below section 9(1)(ii) of the Act by the Finance Act, 1983, with retrospective effect from April 1, 1979. In relation to the alternative contention, the Assessing Officer observed that the assessee could get relief under the Double Taxation Agreement on production of the assessment order and proof of payment of tax. That, since no proof was produced, the claim was not entertained. The assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the four conditions stood fulfilled, but according to the Revenue, condition No. 3 (vide sub-clause (c)) was not fulfilled. Mr. Shah, therefore, submitted that the dispute was thus only as regards interpreting the said sub-clauses, and if on reading of the said sub-clauses, the court came to the conclusion that what was contended by the assessee was the correct reading of the article, the assessee should succeed. According to him, when the language provided that "the profits or remuneration are subject to Austrian tax" the only requirement was as to whether the assessee was liable to tax under the Austrian statute and the further requirement insisted upon by the authorities, to the effect that the assessee must have actually paid the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish proof of payment of tax, and in the absence of the same, the Tribunal had correctly upheld the orders of the authorities below. In the circumstances, it was urged that no interference was called for in the order of the Tribunal. Article XIV reads as under [1965] 56 ITR (St.) 17, 21: "Article XIV - (1) Subject to article XII, profits or remuneration from professional services or from services as an employee derived by an individual who is a resident of one of the territories may be taxed in the other territory only if such services are rendered in that other territory. (2) An individual who is a resident of Austria shall not be taxed in India on profits or remuneration referred to in para. (1) if- (a) he is temporarily present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent that the condition does not stipulate actual payment of tax which has been insisted upon by the revenue authorities. All that the provision provides is that the individual should be liable to tax under the Austrian statute. In other words, the Austrian statute must be shown to be levying tax on such remuneration. Being liable to tax and being actually taxed are two different things, and in a given situation, it is always possible, that a person may be liable to tax under a statute, but may not be actually taxed by virtue of, may be, some other provision under the same statute. Therefore, the approach of the authorities below to treat the liability to tax as being actually taxed is not warranted by the language of the provision. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying the Austrian law when it observed that, if India was to give up its right to tax for the income earned in India, it had to be satisfied that the assessee was liable to pay tax in respect of that income in the foreign country with whom the agreement was concluded. In the circumstances, it is necessary that the provisions of the Austrian statute are brought on record and the parties get an opportunity to make their submissions thereon. As the applicant-assessee is claiming benefit under an exception (exemption) provision, it will be upon the assessee to discharge the onus to show that it is subject to Austrian tax. It will be open to the assessee to rely upon the provisions of the Austrian tax statute as well as any other evidence that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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