2014 (2) TMI 379

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....on the following among other grounds:      Education cess    1. The learned Commissioner of Income-tax (Appeals), erred in holding that the education cess and secondary and higher education cess of Rs.50,104 is leviable on tax payable determined as per the India- US tax treaty.      2. The learned Commissioner of Income-tax (Appeals) ought to have appreciated the fact that no education cess and secondary and higher education cess is leviable in the appellant's case as tax payable has been determined by applying the rate of 15% as per Article 12 of the India- US tax treaty. 3. The learned Commissioner of Income-tax (Appeals) erred in not giving the appellant sufficient opportunity....

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.... rate specified in the DTAA. 5. We have heard both the parties and their contentions have carefully been considered. We found that the issue raised by the assessee is covered in favour of the assessee by the aforementioned decisions of Tribunal in the case of Sunil V. Motiani (supra). Reference can be made to the following observations of the Tribunal:      "5. We have perused the records and considered the matter carefully. There is no dispute that the assessee is a non resident based in UAE. There is also no dispute that the assessee had received gross interest of Rs.7,55,187/-from the Indian firms in which he was a partner. The interest income is no doubt taxable as the same had arisen from the sources in India.....

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....Article 11(2) @ 12.5°,6 also includes surcharge. Further, nature of education cess and surcharge being same as held by the Tribunal in the case of DIC Asia Pacific Pte Ltd. (supra), in our view education cess and surcharge cannot be levied separately and will be included in tax rate of 12.5%. The judgment of Hon'ble High Court of Uttarakhand in the case of Arthusa Offshore Co. (supra), is not applicable to the facts of the present case as the Hon'ble High Court was concerned with taxability of income under Article 14(2) of the DTA between India and USA. The Hon'ble High Court was not concerned with interpretation of tax payable on interest income under DTAA. The judgment of AAR in the case of Airports Authority of India, In re (supra), ....