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TMI Blog2024 (9) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... the premise that the revenue and consideration received was in connection with aircraft leasing and would thus amount to royalty by virtue of the relevant provisions of the DTAA. However, on a plain reading of Article 12 (3) (a) of the DTAA, the view as taken is rendered wholly unsustainable. We are also of the considered opinion that it would be wholly impermissible for the AO to invoke Section 9 (1) (vi) of the Act in light of the express exemption under the DTAA. Insofar as the question of interplay between provisions contained in a domestic legislation and those in the DTAA, we have in Telstra. [ 2024 (7) TMI 1340 - DELHI HIGH COURT] already held that the latter would override being more beneficial to the assessee. Accordingly, and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Jolly, learned counsel appearing for the writ petitioner draws our attention to Article 12 of the DTAA and which in unambiguous terms exempts revenue receipts from aircraft leasing from the purview of taxation altogether. Article 12 of the DTAA reads as follows:- "1. Royalties or fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such royalties or fees for technical services may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 10 per cent of the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 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 person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income Tax-International Taxation -3 Vs. Telstra 2024 SCC OnLine Del 5016 already held that the latter would override being more beneficial to the assessee. Our conclusions as set out in para 69 of the report are extracted hereunder:- "69. Once we recognise the Convention as the constant, it becomes apparent that changes in domestic legislation cannot, principally speaking, override the treaty provisions. If a contrarian position were to be accepted, it would lead us to hold that treaty provisions could be amended or overcome based upon the will of Legislatures of independent nations to amend domestic legislation unilaterally and without being bound by the Convention. That is clearly not the position which merits acceptance fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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