Tribunal grants assessee's appeal, rejecting adjournment request and upholding non-taxable income status.

The Tribunal rejected the CIT-DR's adjournment request and decided the appeal ex parte in favor of the assessee based on favorable precedents from previous Tribunal and High Court decisions. The Tribunal applied Section 90(2) of the Income Tax Act, 1961, granting the assessee the benefit of provisions more advantageous under the Double Taxation Avoidance Agreement. The Hon'ble Delhi High Court upheld the Tribunal's decision, dismissing the Department's appeal and confirming that the income in question was not taxable in India. Consequently, the Tribunal allowed the assessee's appeal by reversing the directions under Section 144C(5) of the IT Act, 1961.

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Issues:
1. Request for adjournment by CIT-DR.
2. Whether the issue involved in the appeal is covered in favor of the assessee by previous decisions of the Tribunal and the High Court.
3. Application of Section 90(2) of the Income Tax Act, 1961 and the Double Taxation Avoidance Agreement (DTAA) provisions.
4. Dismissal of appeal by the Hon'ble Delhi High Court.
5. Reversal of directions under Section 144C(5) of the IT Act, 1961.

Issue 1: Request for adjournment by CIT-DR
The learned CIT-DR requested an adjournment of the appeal, which was rejected by the Tribunal due to the submission by the assessee's counsel that the issue in question was already decided in favor of the assessee by previous Tribunal decisions and the High Court.

Issue 2: Precedents favoring the assessee
The counsel for the assessee argued that the issue in the current appeal was previously decided in favor of the assessee by the Tribunal for AY 2006-07 and 2007-08, as well as by the Hon'ble High Court for AY 2007-08. The Tribunal examined the previous decisions and proceeded to decide the appeal ex parte against the Department, citing the favorable precedents.

Issue 3: Application of Section 90(2) of the Income Tax Act, 1961
The Tribunal referred to Section 90(2) of the Income Tax Act, 1961, which allows for the application of provisions more beneficial to the assessee in case of double taxation agreements. The Tribunal held that even if the provisions of the treaty were against the assessee, the benefit of the Act, under which no tax liability could be imposed on the assessee, should be granted.

Issue 4: Dismissal of appeal by the Hon'ble Delhi High Court
The Hon'ble Delhi High Court dismissed the Department's appeal, confirming the Tribunal's order in favor of the assessee. The High Court cited a previous judgment where it was held that the income received from the activities of the assessee would not be subject to tax in India, thus upholding the Tribunal's decision.

Issue 5: Reversal of directions under Section 144C(5) of the IT Act, 1961
Based on the precedents set by the Tribunal and the High Court, the Tribunal reversed the directions under Section 144C(5) of the IT Act, 1961, which had been passed by the Dispute Resolution Panel. Consequently, the appeal of the assessee was allowed.

In conclusion, the Tribunal, following the established precedents and legal provisions, allowed the appeal of the assessee, emphasizing the importance of previous decisions by the Tribunal and the High Court in determining the outcome of the case.

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