9911796707
TMI Blog2018 (2) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... separate notification issued by Central Government for enforcing the subsequent Treaty (DTAA) between India-Finland in the present case, where the petitioner Company is governed by a former India- Netherlands Double Taxation Avoidance Agreements (DTAA), the Protocol thereto itself provides that any subsequent Treaty of India with another OECD (Organisation for Economic Co-operation and Development) Country, if such subsequent Treaty provide for a more beneficial Clause, then, by virtue of Clause-12.4.2 of the Protocol, such subsequent Treaty will automatically apply to the present India- Netherlands DTAA also. 2. Further, the respondent - CIT (IT), relying upon the decision passed by the Authority for Advance Rulings (AAR) in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precedence of notification in the case of India- Netherlands DTAA itself. When the India- US DTAA was entered, a notification was issued to make its beneficial provisions applicable to the Netherlands DTAA. Therefore it cannot be said that the issue of notification is redundant. In the light of the above, I see no reason to intervene in the case and revise the order of the AO. As the question of tax treatment under the India-Finland DTAA no longer arises, the same is not discussed. Since the relevant payment is apparently taxable in India as per the provisions of the Income Tax Act as well as India- Netherlands DTAA, the ruling of Apex Court in GE India case is not applicable in the instant case." 4. Mr. Ajay Vohra, the learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommentary by Klaus Vogel on "Double Taxation Conventions.": "As previously mentioned, (final) Protocols and in some cases other completing documents are frequently attached to treaties. Such documents elaborate and complete the text of a treaty, sometimes even altering the text. Legally they are part of the treaty, and their binding force is equal to that of the principal treaty text. When applying a tax treaty, therefore, it is necessary carefully to examine these additional documents.". 18. The court is, therefore, unable to agree with the conclusion of the Authority for Advance Rulings that the clause 7 of the Protocol, which forms part of the Double Taxation Avoidance Agreement between India and France, does not automatically beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de that the fees for technical services, if such services are rendered and paid in a Contracting State, viz., in Netherlands as in the p resent case, the same cannot be taxed in India, and in vie w of its non-taxability, the provisions with regard to withdrawing of Tax or TDS under Section 195 of the Income Tax Act ('Act') would not apply the Article 12.5 of India-Finland , as aforesaid, read as under:- "5. Royalties or fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub- division, a local authority, or a resident of that State. Where, however, the right or property for which the royalties are paid is used within a Contracting State or the fees for technical servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in passing the impugned order. 9. Secondly, he has submitted that the questions of facts relating to rendering of the services in Netherlands and payment of such fees for technical services in Netherlands are the aspects which have not been considered by the CIT (IT) in detail. However, Mr. Aravind, despite the query from the Court as to whether the Revenue has preferred any Special Leave Petition or Regular Appeal against the Division Bench's judgment of the Delhi High in the case of Steria (India) Ltd. (surpa), was unable to give any specific information about the same to the Court. 10. Having heard the learned counsels for the parties and in view of the Division Bench judgment of the Delhi High Court, respectfully following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the impugned order cannot be sustained in the eye of law. However, since the factual aspects of the matter about the payment of fees for technical services for rendering such services and payments made therefor are the questions of facts, which in the impugned order, this Court does not find any detailed discussion on the said issues. Therefore, that aspect of the matter may be required to be loo ked into by the CIT (IT) again, who would re-decide the said Revision Petition filed by the petitioner-assessee under Section 264 of the Act de novo. Therefore, this Court need not give its own findings on these aspects of the matter. 14. In view of the aforesaid, the present Writ Petitions are allowed and the impugned order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
