Tribunal Rules Interconnect Usage Charges to Non-Treaty Country Not Taxable as Royalty Under DTAA Provisions.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....TDS u/s 195 - payment received for interconnect usage charges - transaction with non-treaty country - The assessee contested the taxability of these payments as "royalty" and argued for the consideration of DTAA provisions. The Tribunal following the decision of the High Court's judgment, clarified that DTAA can indeed be considered in such proceedings and that amendments to the Income Tax Act do not automatically amend DTAA provisions. The ITAT further held that payments made to non-resident telecom operators for interconnect services are not taxable as royalty. Additionally, it affirmed that Income Tax Authorities lack jurisdiction to tax income arising from extraterritorial sources.....