Taxability of receipts under India-USA DTAA follows binding precedent; income held not taxable in India

Where the assessee's receipts raised the same taxability question already decided in its own earlier year and covered by binding jurisdictional High Court precedent, the Tribunal followed the coordinate bench and High Court rulings and held that the income was not chargeable to tax in India, including as royalties under the Act and the India-USA DTAA. The appeal was allowed and the assessment was set aside to the extent inconsistent with that finding.

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Issues: Whether the assessee's receipts were liable to tax in India and taxable as royalties under the Act and the India-USA DTAA.

Analysis: The Tribunal noted that the dispute was identical to the issue already decided in the assessee's own case for an earlier assessment year. It further noted that the jurisdictional High Court had considered the same line of controversy and had dismissed the Revenue's appeals where the issue was covered by earlier binding decisions. Following the coordinate bench decision and the jurisdictional High Court rulings, the Tribunal held that the assessee's income was not chargeable to tax in India.

Conclusion: The issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessment was set aside to the extent that the assessee's income was held not taxable in India.

Ratio Decidendi: Where the identical taxability issue is already settled by binding jurisdictional High Court precedent, the assessee's receipts cannot be taxed in India and must be treated as not liable to tax.

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