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TMI Blog2019 (8) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... award dated 17.11.2014. 2. The record shows that the judgment debtor had filed objections under Section 48 of the Arbitration and Conciliation Act, 1996 (in short "1996 Act"). This court dismissed the objections vide judgment dated 03.07.2017. 3. The judgment debtor had carried the matter in appeal right up to the Supreme Court. The Supreme Court, vide order dated 23.08.2017 passed in Special Leave Petition (Civil) No.20759-20761/2017 (SLP), dismissed the SLP. Consequently, the judgment of this court dated 03.07.2017 stands sustained. 4. The record also shows that pursuant to the order passed by this court dated 25.08.2017, the judgment debtor deposited the entire decretal amount along with interest up to the date of the deposit i.e. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ascertain the view of the Income Tax Department as to whether the decree holder could be called upon to pay withholding tax. 5. Mr. Ajit Sharma, Advocate, who appears on behalf of the income tax department, has adverted to the affidavit of Dr. Prabha Kant, Commissioner of Income Tax (International Taxation) - 1. To be noted, the copy of the affidavit handed over to me in Court is undated and does not bear the signatures of Dr. Prabha Kant i.e. the Deponent. On being queried, Mr. Sharma states that the contents of the affidavit handed over in Court are identical to the original affidavit which is signed by Dr. Prabha Kant i.e. the Deponent, though, inadvertently not filed. 5.1. Mr. Sharma, in support of his submissions, has relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng officer in detailed assessment under the IT Act. At this stage, it would be fair to deduct tax @ 42.024% on the award income under the provisions of the Act. Cost of Arbitration proceedings USD 80,440 This portion of the award is in lieu of expenses incurred by Glencore International on a number of items which mainly include costs incurred on engaging professional experts like lawyers etc. for the purposes of arbitration. Therefore, Glencore has incurred these expenses for availing services which are prima-facie technical/consultancy services which are taxable as "Fee for Technical services" under the provisions of Income Tax Act as well as DTAA. The payment by Dalmia to Glencore appears as reimbursement but if we see the money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of contract is liable for taxation in India as it is a "windfall gain" and hence is covered under Article 22(3) of the Double Taxation Avoidance Agreement ("DTAA") subsisting between India and Switzerland. 8. Mr. Ajit Sharma, says that there is no dispute that the decree holder does not have a permanent establishment in India. The objection according to Mr. Sharma qua this aspect veers around Article 22(3) of the DTAA. The said article reads as follows: "Article 22 Other Income 1. xxx xxx xxx 2. xxx xxx xxx 3. Notwithstanding the provisions of paragraph 1, if a resident of a Contracting State derives income from sources within the other Contracting State in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stand taken by the income tax department on this score would also have to be rejected. 14. This brings me to the last aspect which relates to the interest. 14.1 Mr. Ajit Sharma, says that the taxability qua interest would also be the subject matter of Article 22(3) of the DTAA. In my opinion, this stand is plainly wrong. The language of Article 22(3) of the DTAA does not support the stand of the income tax department. 15. I must, however, indicate that Mr. Sharma has submitted that the assertions made in Dr. Prabha Kant's affidavit conveys only a prima facie view of the matter and that a final view can only be taken once assessment proceedings commence. 16. This aspect of the matter, even according to Mr. Sharma, does not concern the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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