Treaty entitlement prevails over section 206AA where binding precedent already settles the issue against the Revenue.

Section 206AA was held not to displace treaty entitlement under a double taxation avoidance agreement where the issue had already been covered by a binding earlier decision of the Court. The substantial questions of law were answered consistently with that precedent in favour of the assessee and against the Revenue, and the Revenue's appeal was dismissed. The governing principle applied was that when a legal issue is already settled by binding precedent, the same question must be answered in the same manner.

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Issues: Whether section 206AA of the Income-tax Act overrides the treaty entitlement under a double taxation avoidance agreement, and whether the substantial questions of law should be answered in favour of the Revenue or the Assessee.

Analysis: The appeal was stated to be covered by an earlier decision of the Court in the assessee's favour, and that position was not disputed by the Revenue. In that view, the questions referred were required to be answered consistently with the prior binding decision.

Conclusion: The substantial questions of law were answered in favour of the Assessee and against the Revenue.

Final Conclusion: The Revenue's appeal stood dismissed, and the assessee succeeded on the question whether the treaty position prevailed over the domestic withholding provision in the manner already settled by the Court.

Ratio Decidendi: Where the legal issue is already covered by a binding decision of the Court, the same question of law must be answered consistently with that precedent.

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