TaxTMI 
TaxTMI 
2021 (9) TMI 653
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....168/Bang/2017 in respect of the assessment year 2013-14. 2. Learned counsel for the respondent at the outset has drawn the attention of this Court towards the judgment delivered in ITA.No.278/2012, decided on 1.10.2020 and his contention is that the identical question of law has already been answered against the revenue and in favour of the assessee. 3. This Court has admitted the appeal on the following substantial question of law; "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that royalty income in respect of agreement entered into before 1/6/2005 which are from one source and royalty income in respect of an agreement entered into on or after that date are from the s....
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.... 3. Facts leading to filing of the appeal briefly stated are that the assessee is a foreign company which filed the return of income on 30.10.2007 claiming the income of Rs. 50,72,30,070/-. Thereafter, the assessee filed revised return of income on 31.03.2005 by which an income of Rs. 2,08,01,76,260/- was declared. The case of the assessee was taken up for scrutiny and a notice under Section 143(2) of the Act was issued on 14.08.2008. The Assessing Officer, by an order dated 30.12.2010, accepted the return filed by the assessee declaring the income from royalty and fee for technical services and concluded the assessment by levying tax at the rate of 15%. Interest under Section 234B of the Act was also levied. Being aggrieved, the assess....
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....ayable on royalty income received in pursuance of agreements entered into on or before 01.06.2005. It is further submitted that the Tribunal erred in holding that the assessee is entitled to split the source of income to apply different rates of tax under DTAA and under Section 115A of the Act, when the rate of tax has to be applied on the total income of the assessee at the rate beneficial to the assessee as per Section 90(2) of the Act. On the other hand, learned counsel for the assessee has submitted that the view taken by the Tribunal is just and proper and does not call for any interference. 5. We have considered the submissions made by the learned counsel for the parties and have perused the record. As per Section 90(2) of th....
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....not be levied on an aggregate basis and taxability of royalty under sub- clauses (A), (AB), (BB) and (C) of Section 115(a)(b) are separate and distinct. The assessee therefore can compute tax at the rate beneficial to it which is in accordance of provisions of Section 90(2) of the Act, wherein the expression 'to the extent' makes it evident that provisions of the Act or Treaty, whichever is beneficial, is applicable to the assessee. Therefore, the Tribunal has rightly held that the date of agreement while determining the rate of tax under the aforesaid clauses of Section 115(A)(1)(b) are separate and independent. It is also pertinent to note that the explanatory note to the provisions of Finance Act, 2013, were issued by Circular No.3/2014 ....
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....se of non-resident taxpayer, in respect of income by way of royalty and fees for technical services as provided under Section 115A, has been increased from 10 per cent to 25 per cent. This rate of 25 per cent shall be applicable to any income by way of royalty and FTS received by a non- resident, under an agreement entered after 31.03.1976, which is taxable under section 115A. 26.4 Applicability- This amendment takes effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years." 7. From perusal of relevant extract of the aforesaid explanatory note, it is evident that in order to correct the anomaly prevalent in Section 115A with regard to rates of taxes....