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TMI Blog2024 (11) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... its depending on the existence of a PE in the Contracting State. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... and held that such income shall not taxable in the hands of the non-resident. 2.8. The learned AO erred in levying interest under section 234B of the Act. Each of the above ground is independent and without prejudice to the other grounds of appeal preferred by the Appellant. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Honourable Income Tax Appellate Tribunal to decide this appeal according to law." 3. At the very outset, the ld. Counsel for the assessee stated that the impugned issues have been decided in favour of the assessee and against the revenue in assessee's own case for earlier AYs 2003-04 to 2019-20. It is the say of the ld. Counsel that the impugned quarrel is now well-settled by the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Limited v. CIT [2021] 432 ITR 471 (SC). Per contra, the ld. D/R could not bring any decision in favour of the revenue and strongly relied upon the findings of the lower authorities. 4. We have given a thoughtful consideration to the orders of the authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lence Private Limited Vs. Commissioner of Income Tax and another. At the same time, Ms. Nagraj submits that there is a review petition pending in the Supreme Court and therefore, the Court may dispose the appeal with liberty to appellant to approach this Court to either revive the appeal or file a fresh appeal in case the review petition is allowed in favour of Revenue. 2. Appeal disposed with liberty as prayed for." 8. This quarrel has attained finality by the decision of the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Limited v. CIT [2021] 432 ITR 471 (SC). The most relevant findings of the Hon'ble Supreme Court reads as under:- 156. It is significant to note that after India took such positions qua the OECD Commentary, no bilateral amendment was made by India and the other Contracting States to change the definition of royalties contained in any of the DTAAs that we are concerned with in these appeals, in accordance with its position. As a matter of fact, DTAAs that were amended subsequently, such as the Convention between the Republic of India and the Kingdom of Morocco for the Avoidance of Double Taxation and the Prevention of Fisca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nflicting municipal decisions. From this point of view also, the OECD Commentary is significant, as the Contracting States to which the persons deducting tax/assessee's belong, can conclude business transactions on the basis that they are to be taxed either on income by way of royalties for parting with copyright, or income derived from licence agreements which is then taxed as business profits depending on the existence of a PE in the Contracting State. 160. The learned Additional Solicitor General, however, relied upon the HPC Report 2003 and the E-Commerce Report 2016. The HPC Rol 2003, noting the various characterisation issues in relation to e-commerce payments, recommended as follows: "...The Committee also recommends that a clear position on each category of transactions should be taken by the Central Board of Direct Taxes ('CBDT"). This will ensure uniformity of approach among all the assessing officers. Since new categories of transactions are likely to emerge at a fast pace with advances in technology, it is also recommended that the CBDT should closely monitor the developments and issue guidelines to the assessing officers on new emerging categories of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e General Agreement on Tariffs and Trade (GATT), 1994, as follows: "23. A conspectus of the aforesaid authorities would lead to the following conclusions: (1) Article 51(c) of the Constitution of India is a directive principle of State policy which states that the State shall endeavour to foster respect for international law and treaty obligations. As a result, rules of international law which are not contrary to domestic law are followed by the courts in this country. This is a situation in which there is an international treaty to which India is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India is a signatory nation to an international treaty, and a statute is passed pursuant to the said treaty, it is a legitimate aid to the construction of the provisions of such statute that are vague or ambiguous to have recourse to the terms of the treaty to resolve such ambiguity in favour of a meaning that is consistent with the provisions of the treaty. (3) In a situation where India is a si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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