1989 (9) TMI 137

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....6 should be taxed at 40% and not at 53.75% as was done by the ITO. 2. The assessee had contended before the ITO that the amount was liable to be taxed at 40% only in terms of the provisions of section 115A(1)(b). The ITO, however, rejected this claim. He observed that the payment was under an agreement dated 16-4-73. The same was merely amended in 1979 and, therefore, it cannot be considered as a....

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....o extend the same. A fresh agreement came into effect in 1979 on exercising such an option. Though fresh lease was under the provisions of the old agreement under which the life of the agreement could be extended, the same cannot be regarded as an agreement entered into by the assessee with the Indian company in 1973. These two agreements are different in material details. The consideration under ....

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....the Government of India. In such circumstances, we are of the view that the agreement entered into 1979 is a different agreement and, therefore, the effective rate of tax on the royalty received would be only 40%. The CIT(A)'s order in this regard is confirmed. 4. The second ground of appeal is that the CIT(A) was in error in deleting the addition of Rs. 7,74,073 made by the ITO on protective bas....