1997 (7) TMI 20

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....In this tax case petition, the Department requires this court to direct the Tribunal to refer the following question of law for the opinion of this court under section 256(2) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that income derived from Sri Lanka cannot be taxed in India ?" During the previ....

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.... 24, 1988, that since the income had not suffered tax in Sri Lanka there will be no question of any double taxation. The Commissioner of Income-tax (Appeals) held that the assessee will be entitled to appropriate abatement of tax by granting credit for the Sri Lankan tax payable on the income received in Sri Lanka. He, however, did not agree with the claim of the assessee that it had a permanent e....

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....le 12(4) where royalties arise through a permanent establishment it is treated as business profits falling within article 7. That article provides that the profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. In that event, the profits have to ....

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....he Sri Lankan Government would not give rise to tax the same under the Indian Income-tax Act. Under article 24(1) when income or capital is subject to tax in both Contracting States, relief from double taxation is to be given in accordance with paragraph (2). In the present case, the income arose in Sri Lanka and it is taxable only in Sri Lanka. The fact that it was not taxed in Sri Lanka would no....