TaxTMI 
TaxTMI 
1995 (4) TMI 115
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....Relief under Double Taxation Agreement with Singapore Rs. 3,79,459 ------------- Gross tax payable Rs. 51,21,811 -------....
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....y. 8. on his part, the learned Departmental Representative strongly opposed the contentions of the learned counsel for the assessee. 9. To understand the point made by the learned counsel for the assessee on this issue, it is necessary to abstract side by side the mode of calculation adopted by the Assessing Officer on the one hand and the mode of calculation pressed for by the assessee's counsel on the other. The following are the relevant details : According to A. O. According to 'A' ---------------------------------------------- &nb....
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....bsp; Less : Donation 2,50,000 2,50,000 Profit u/s 41(2) 27,886 27,886 --------------------------------------- 1,07....
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....p; 10,29,729 --------------------------------------- 13,47,079 11,95,295 Less : DTA Relief - 3,79,459  ....
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....y the assessee is in consonance with the provisions of the Double Taxation Avoidance Agreement in question. 10. Before examining the validity of the method of calculation adopted by the assessee, we may notice the statutory genesis of and the plane on which Double Taxation Agreements operate and their effect on the assessment under Indian-tax Laws. 11. First, we have provisions such as those contained in section 90 of the Income-tax Act, 1961, section 24A of the C.P.S.T. Act, 1964, section 44A of the Wealth-tax Act, 1957 and section 44 of the Gift-tax Act, 1958. These are enabling provisions and the various Double Taxation Agreements (to use a generic term) concluded by the Government of India and the Governments of other countries owe their origin to one or the other of the said sections. 12. Secondly, for determining the tax payable by an assessee under the Indian Tax Laws, one has to look only to those laws. In other words, the tax payable under the Indian Tax Laws must be determined in the ordinary way applying the provisions of the Indian laws. This is the first stage. In the second stage, the Double Taxation Agreements come into play. It is at this stage that the ....
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.... surcharge on income-tax imposed under the Income-tax Act, 1961 (ii) the surtax imposed under the Companies (Profits) Surtax Act, 1964 both of which are called "Indian tax". In the case of Singapore, the Agreement applies to income-tax levied there, which is referred to as "Singapore tax". We then have Article 24 which occurs under Chapter IV --- " Method for Elimination of Double Taxation". Paragraph (1) of the said Article stipulates that the laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Agreement. Where income is subject to tax in both Contracting States, relief from double taxation shall be given in accordance with paragraphs (2) and (3) of the said Article. Sub-paragraph (a) of paragraph (2) of Article 24 is relevant here and reads as follows : " (2)(a) The amount of Singapore tax payable, under the laws of Singapore, and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of India, in respect of income from sources within Singapore which has been subjected to tax both in In....
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....nbsp; 2,50,000 (b) Profit under section 41(2) 27,886 2,77,886 -------- ----------- Balance of the total income 1,07,24,654 ....
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....tax 32,36,587 Surtax payable 11,95,295 --------- Now the Assessing Officer had computed chargeable profits of the assessee at Rs. 36,16,046 and has on that basis computed the surtax payable by the assessee at Rs. 13,47,079. In the process, as rightly contended by the learned counsel for the assessee, the Assessing Officer totally omitted to apply the provisions of Rule 2(ii) of the First Schedule of the C.P.S.T. Act. 18. The next issue relates to the quantum of DTA relief admissible to the assessee in the surtax proceedings. We have already reproduced on page 5 supra the calculations given by the assessee. It will be seen therefrom that according to the assessee the surtax payable net of DTA relief is Rs. 8,15,836. As we see it, though the assessee is right in contend....
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....to account DTA relief 55,01,270 Surtax -do- 11,95,295 Total "Indian tax" 66,96,565 Less : DTA relief 3,79,459 &nbs....