TaxTMI 
TaxTMI 
2022 (9) TMI 1447
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.... (i) there was no intention to change the scope and make it more restrictive and (ii) Protocol, ipso- facto cannot be given effect to, in absence of the notification? 3. Whether the Ld. CIT(A) has erred in law in not passing a speaking order and not discussing the main issue i.e. whether the provision of "most favoured nation" in protocol 7 of India-France DTAA shall become automatically applicable without a separate notification incorporating the beneficial provision of India. UK DTAA in the India-France DTAA particularly keeping in view that the decision in the case of Steria (India) Ltd. Vs. Commissioner of Income Tax [ 2016] (386 ITR 390) (Delhi HC), the fact of issue of notification So No. 650 (E), dated 10.07.2000 was not even argued and thus the decision of Hon'ble High Court in Steria India (supra) does not take into account full facts of the case ? 4. Whether the Ld. CIT(A) has erred in law in not providing the reasonable opportunity to the assessing officer to examine the additional evidence submitted by the assessee to the Ld. CIT(A) as referred by him in para 6.5 of his order dated 26.07.2019, which is in violation of the Rule 46A of the Income Tax Rul....
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....er observed that the protocol could not be treated as forming part of the DTAA itself unless there is a notification issued by the Government to incorporate the less restrictive provisions of the other treaty available. Accordingly the AO treated the revenue amounting to Rs.55714648/- received on account of intermediary services taxable as FTS. 11. Assessee challenged the assessment before the CIT(A) and reiterated its contention that the management charges are not taxable in India. 12. After considering the facts and the submissions the CIT(A) directed the assessee to furnish supporting documentation/ electronic mails to substantiate the nature of services provided by the assessee. 13. The assessee furnished the information/documents required by the CIT(A) and the CIT(A) after examining the documents was convinced with the contention of the assessee and held that the amount received by the assessee during the year for provision of management support services shall not be taxable as FTS under the tax treaty since the make available test imported from India UK tax treaty into the India France treaty had not been satisfied in this case. 14. The bone of contention is the i....
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....e, skill, know-how or processes, which enables the persons acquiring the services to apply the technology contained therein. 22. Considering the factual matrix of the case in hand in the light of the judicial decisions discussed here in above we do not find any error or infirmity in the findings of the CIT(A) which need interference. 23. In so far as the contention that the CIT(A) has admitted additional evidences in violation of rule 46 A of the Income Tax Rules 1962 is concerned we do not find any merit in this contention of the revenue because the CIT(A) invoking the powers conferred upon him u/s. 250 (4) of the Act called for certain information/ documents and based his findings on such information / documents. In our considered opinion in the light of section 254 (4) of the Act the CIT(A) is free to conduct the enquiry to dispose of the appeal as he deems fit. We, therefore, decline to interfere with the findings of the CIT(A). The appeal filed by the revenue is dismissed. Order pronounced in the open court on 23.09.2022 ============= Document 1 4.4 Requirement of notification under Section 90 of the Income-tax Act, 1961: Further, it is a domestic requirement ....
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....al Government, has not been challenged before us, and, therefore, we must proceed on the footing that the section is constitutionally valid. The challenge being only to the exercise of the power emanating from the section, we are of the view that section 90 enables the Central Government to enter into a DTAC with the foreign Government. When the requisite notification has been issued thereunder, the provisions of sub-section (2) of section 90 spring into operation and an assessee who is covered by the provisions of the DTAC is entitled to seek benefits thereunder, even if the provisions of the DTAC are inconsistent with the provisions of income-tax Act, 1961." (emphasis supplied) 4.4.1 It may be noted that India has not issued any notification importing the benefit of treaties with Slovenia, Lithuania and Colombia to treaties with The Netherlands, France or the Swiss Confederation. Document 3 Notwithstanding the above, it can be seen that the CBDT has panned out a fresh requirement of separate notification to be issued for India importing the benefits of the DTAA from second State to the DTAA with the first State by virtue of its Circular, r....
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....d fees for managerial services in "Fees for Technical Services", whereas, in contrast, the India-UK DTAA expressly excludes fees for managerial services from Fees for Technical Services". i. The India UK DTAA contained a make available" clause for a service to constitute "technical service i.e. that the provider of the service, must "hake available" technical knowledge, experience, skill, know how or processes to the persons to whom the service is rendered, or must have developed and transferred a technical plan or technical design to the person to whom the service is rendered. In contrast, the India-France DTAA did not incorporate any such "make available" requirement or criterion and, therefore, ambit of the term "Fees for Technical Services" is much more restricted in the India- UK DTAA as compared to the India-France DTAA. 7. Before the AAR, the Petitioner contended that having regard to Clause Document 6 7 of the 'Protocol' the less restrictive definition of the expression 'fees for technical services' appearing in the Indo-UK DTAA, must be read as forming part of the India- France DTAA as well. The AAR, by the impugne....
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....nt 8 5. The definition of fees for technical services in paragraph 4 of this Article shall not include amounts paid: (a) for services that are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of property, other than property described in paragraph 3(a) of this Article; (b) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships, or aircraft in international traffic;F e) for teaching in or by educational institutions; DELH CH (dy for services for the private use of the individual or individuals making the payment or to an employee of the person making the payments or to any individual or partnership for profession services as defined in Article 15 (independent personal services) of this Contention 12. At this juncture, it is necessary to refer to Clause 7 of the Protoc: executed separately between India and France which forms part of th DTAA. Clause thereof which is relevant for the present purposes reads= under. सतà¥à¤¯à¤®à¥‡à¤µ जयतà....
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.... Present writ petition has been filed challenging the certificate dated 18th November, 2021 read with the impugned order passed by the Respondent directing Galderma India to deduct tax @ 10% on dividend income to be paid to the Petitioner for the relevant Financial Year. Petitioner also seeks a direction allowing Galderma India to pay dividend to the Petitioner for the relevant Financial Year after deducting tax @ 5% in terms of the Protocol to the DTAA between India and Switzerland at the time of payment of such dividend. 2. Learned Counsel for the Petitioner states that the impugned certificate dated 18th November, 2021 read with the Impugned Order communicating the reasons passed under Section 197 of the Act rejecting the Petitioner's request for lower withholding of tax @ 5% Document 12 on dividends proposed to be distributed by Galderma India to the Petitioner for Financial Year 2021-22 illegal and should be quashed. 3. Learned counsel for the Petitioner states that even though Article 10 of the India-Switzerland DTAA provides for withholding tax @10% on dividend paid by an Indian resident to a Swiss resident entity, the ....