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Issues: (i) Whether royalty and fees for technical services were taxable on receipt basis under the applicable treaty; (ii) whether interest under section 234B of the Income-tax Act, 1961 was leviable on a non-resident assessee.
Issue (i): Whether royalty and fees for technical services were taxable on receipt basis under the applicable treaty.
Analysis: The assessment of royalty and fees for technical services was governed by the treaty provision referred to in the judgment, and the Tribunal held that such income was assessable in the year of receipt and not otherwise. The Revenue's reliance on an earlier Tribunal decision was found inapposite because it related to a period prior to the relevant notification.
Conclusion: The finding that royalty and fees for technical services were taxable on receipt basis was upheld, in favour of the assessee.
Issue (ii): Whether interest under section 234B of the Income-tax Act, 1961 was leviable on a non-resident assessee.
Analysis: The question was stated to be covered against the Revenue by an earlier judgment of the Court, and no independent basis was found to entertain the Revenue's challenge.
Conclusion: Interest under section 234B was held not leviable, in favour of the assessee.
Final Conclusion: The Revenue's appeal failed and the order in favour of the non-resident assessee was maintained.
Ratio Decidendi: Where the applicable treaty provides for taxation of royalty and fees for technical services on receipt basis, such income is assessable only in the year of receipt, and section 234B interest is not attracted against a non-resident where the issue is covered by binding precedent.
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