Union of India v. Azadi Bachao Andolan

263 ITR 706Supreme Court of India2003#79 most cited

What is Union of India v. Azadi Bachao Andolan authority for?

A citizen is free to carry on business within the law, and mere tax planning without a motive to evade taxes through colorable devices is not frowned upon. The liability to taxation, for the purpose of tax treaty application, is a legal situation, not the fiscal fact of actual payment.

691

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2008 to 2026.

Also referred to as

Union of India v. Azadi Bachao Andolan · section 90 · treaty benefits · tax planning · colourable devices · liability to taxation · payment of tax · Article 4 · tax treaty

Also reported as

132 Taxmann.com 373

Sections most often in play

Section 143(3)Section 139(1)Section 90Section 234BSection 143(2)Section 143(1)Section 142(1)Section 148
Read the full judgment

Issues it is cited on

section 286(9)section 90(1)(b)principal purpose testsection 2(ma)multilateral instrumentsection 286azadi bachao andolansection 90(1)treaty benefitssection 295section 28(i)ppt

Judgments citing Union of India v. Azadi Bachao Andolan

ADIT Intl. Taxation, Dehradun vs. M/S. Hampson Russell Ltd. Partnership., Mumbai

In the result, the appeal of the Revenue is allowed partly for statistical purposes

ITA 1182/DEL/2012[2007-08]Status: DisposedITAT Delhi21 Apr 2017AY 2007-08

Bench: Sh. H.S. Sidhu & Sh. O.P. Kant

Section 115ASection 44BSection 44DSection 9Section 9(1)(vi)

…eipt is not taxable as per the treaty provisions, it cannot be taxed under the provisions of the income tax Act, 1961. In support of his contention, he relied on the judgment of the Hon’ble Supreme Court in the case of Union of India Vs. Azadi Bachao Andolan, 263 ITR 706. 7. We have heard the rival submission and perused the relevant material on record. In both the appeals of the Revenue and the assessee the first issue which arises for our consideration is as follows: “Whether income from supply of software and software maintenance/ support services to entities engaged in exploration of mineral oil is squarely…

M/S Sudera Services (P) Ltd., Kolkata vs. The ITO, WD-8(4), Kolkata

In the result, the appeal of the assessee is allowed

ITA 724/KOL/2015[2011-2012]Status: DisposedITAT Kolkata19 Apr 2017AY 2011-2012
Section 143(3)

…m of the assessee for the impugned loss on the ground that no prudent business man will indulge in the impugned loss. However we find that in the similar facts & circumstances the Hon'ble apex court in the case of Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC) held that the transaction of sale of shares in the present case cannot be considered as a sham or a device to void tax. “An act which is otherwise valid in law cannot be treated as non est merely on the basis of some underlying motive supposedly resulting in some economic detriment or prejudice to the national interests; not only is the pri…

Shloka Traders P.Ltd, Mumbai vs. DCIT Cen Cir 13, Mumbai

ITA 4004/MUM/2014[2011-12]Status: DisposedITAT Mumbai05 Apr 2017AY 2011-12

Bench: Shri B.R. Baskaran (Am)& Shri Pawan Singh (Jm)

Section 10Section 115J

…lanned there is nothing to impeach the genuineness of the transaction. With regard to the ruling in McDowell and Co. Ltd v. CTO (1985) 154 ITR 148 (SC), it may be stated that in the later decision of this court in Union of India v. Azadi Bachao Andolan (2003) 263 ITR 706 it has been held that a citizen is free to carry on its business within the four corners of the law. That, mere tax planning, without any motive to 5 M/s. Shloka Traders Pvt. Ltd. evade taxes through colourable devices is not frowned upon even by the judgment of this court in McDowell and Co Ltd’s case (supra). Hence, in the cases arising before…

DCIT Cen Cir 8(1), Mumbai vs. Bhuta Investment P.Ltd, Mumbai

ITA 1291/MUM/2015[2008-09]Status: DisposedITAT Mumbai16 Mar 2017AY 2008-09

Bench: Shri Mahavir Singh & Shri Ashwani Tanejaassessment Year: 2008-09

Section 143(3)Section 153A

…Supreme Court in McDowell's case and some other cases has no relevance to the issue at hand. The decision of Hon'ble Supreme Court in McDwell’s case is not universally applicable, as has been held in the following cases Union of India Vs. Azadi Bachao Andolan 263 ITR 706(SC) CWT Vs Arvind Narottarn 173 ITR 479 (SC). Banyan & Berry Vs. CIT 222 ITR 831 (Guj). Mathuram Agarwal Vs. State of Madhya pradesh 8 SCC 667. We also found that the documents filed by the assessee along with case laws were forwarded by CIT(A) for remand report to the AO vide letter dated 16-12-2013 and vide letter dated 31-12-2013, the AO sent…

ITO (TDS) Ltu, Mumbai vs. Reliance Industreis Ltd, Mumbai

ITA 6870/MUM/2013[]Status: DisposedITAT Mumbai08 Mar 2017

Bench: Shri B.R. Baskaran (Am)& C.N. Prasad (Jm)

Section 195(2)Section 9(1)(vi)Section 9(2)

…greement between the parties. Unilateral amendments to treaties are therefore categorically prohibited. Even the Parliament is not competent to effect amendments to international instruments. As held by the Hon‘ble Supreme Court in Azadi Bachao Andolan (2003) 263 ITR 607, these treaties are creations of a different process subject to negotiations by sovereign nations. While relying on the decision of the Hon‘ble Madras High Court, in CIT vs VR. S.RM. Firms & Ors, the Hon‘ble Delhi High Court has held that the tax treaties are considered to be mini legislation containing in themselves all the relevant aspects or f…

Reliance Industries Ltd, Mumbai vs. ITO (TDS) (Ltu), Mumbai

ITA 3222/MUM/2012[2010-11]Status: DisposedITAT Mumbai08 Mar 2017AY 2010-11

Bench: Shri B.R. Baskaran (Am)& C.N. Prasad (Jm)

Section 195(2)Section 9(1)(vi)Section 9(2)

…greement between the parties. Unilateral amendments to treaties are therefore categorically prohibited. Even the Parliament is not competent to effect amendments to international instruments. As held by the Hon‘ble Supreme Court in Azadi Bachao Andolan (2003) 263 ITR 607, these treaties are creations of a different process subject to negotiations by sovereign nations. While relying on the decision of the Hon‘ble Madras High Court, in CIT vs VR. S.RM. Firms & Ors, the Hon‘ble Delhi High Court has held that the tax treaties are considered to be mini legislation containing in themselves all the relevant aspects or f…

I.T.O WD - 8(3), Kolkata vs. M/S Ruia Sons Pvt Ltd., Kolkata

In the result the appeal by the revenue is partly allowed

ITA 365/KOL/2013[2009-10]Status: DisposedITAT Kolkata03 Mar 2017AY 2009-10

Bench: Hon’Ble Sri M.Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm] I.T.A No. 365/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-8(3), -Vs.- M/S. Ruia Sons Pvt. Ltd. Kolkata Kolkata [Pan : Aaccr 3949 Q] (Respondent) (Appellant) For The Appellant : Shri Arup Kumar Sinha, Cit For The Respondent : Shri Manoj Kataruka, Advocate

For Appellant: Shri Arup Kumar Sinha, CITFor Respondent: Shri Manoj Kataruka, Advocate
Section 143(2)Section 143(3)Section 194CSection 194JSection 301Section 40

…d's resolution is no doubt an important piece of evidence and even though it is made by the Board of Directors, it has to be considered and taken cognizance of and cannot be brushed aside. The Supreme Court in the case of Union of India Vs Azadi Bacho Andolen 263 ITR 706 (SJ~) after considering the decision of the Supreme Court in the case of MacDowell 154 ITR 148 made a distinction between tax avoidance and tax planning. it was held:- "having anxiously scanned MacDowell' s case, we find no reference therein to having dissented from or overruled the decision of the Privy Council in the Bank of Chettinands case 8…

I T C Limited, Kolkata vs. ADIT(It) 2(1), Kolkata

In the result appeal by the Assessee is allowed

ITA 673/KOL/2013[2010-11]Status: DisposedITAT Kolkata01 Mar 2017AY 2010-11

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am] I.T.A No. 673/Kol/2013 Assessment Year : 2010-11 I.T.C. Limited -Vs.- A.D.I.T. (I.T.)-2(1) Kolkata Kolkata [Pan : Aaaci 5950 L] (Appellant) (Respondent) For The Appellant : Shri J.P.Khaitan, Advocate For The Respondent : Shri N.B.Som, Jcit. Sr.Dr

For Appellant: Shri J.P.Khaitan, AdvocateFor Respondent: Shri N.B.Som, JCIT. Sr.DR
Section 195Section 201

…eement between the parties. Unilateral amendments to treaties are therefore categorically prohibited. Even the Parliament is not competent to effect amendments to international instruments. As held by the Hon’ble Supreme Court in “Azadi Bachao Andolan” (2003) 263 ITR 607, these treaties are creations of a different process subject to negotiations by sovereign nations. Therefore insertion of Explanation-4 in the definition of “Royalty” in Sec.9(1)(vi) of the Act by the Finance Act, 2012, w.r.e.f. 1-6- 1976, has no effect whatsoever and the issue has to be decided in the light of the definition of “Royalty” as cont…

The ACIT, 1(1), Bhopal vs. M/S. Andritz Hydro Pvt. Ltd., Raisen

In the result, grounds taken by the assessee in all the years with respect to provision of warranty are allowed

ITA 349/IND/2016[2011-12]Status: DisposedITAT Indore28 Feb 2017AY 2011-12

Bench: Shri D.T. Garasia & Shri O.P. Meena

Section 143(3)Section 144C

…ween the appellant and the nonresident company is of sale and purchase of goods on principal to principal basis. The meaning of ‘royalty’ has been defined in the DTAA. The Apex Court in the case of Union of India Vs Azadi Bacho Andolan and Another reported in 263 ITR 706 (SC) held that in case of difference between the provisions of the Act and the Agreement, the provisions of the Agreement would prevail over the provisions of the Act, therefore, the definition of ‘royalty’ is under the domestic law is not applicable for the purpose of understanding the concept of royalty under the Double Taxation Avoidance Agree…

M/S Andritz Hydro Private Limited (Earlier Known As V A Tech Hydro Indai Pvt. Ltd.), Mandideep vs. The ACIT 1(1), Bhopal

In the result, grounds taken by the assessee in all the years with respect to provision of warranty are allowed

ITA 316/IND/2016[2011-12]Status: DisposedITAT Indore28 Feb 2017AY 2011-12

Bench: Shri D.T. Garasia & Shri O.P. Meena

Section 143(3)Section 144C

…ween the appellant and the nonresident company is of sale and purchase of goods on principal to principal basis. The meaning of ‘royalty’ has been defined in the DTAA. The Apex Court in the case of Union of India Vs Azadi Bacho Andolan and Another reported in 263 ITR 706 (SC) held that in case of difference between the provisions of the Act and the Agreement, the provisions of the Agreement would prevail over the provisions of the Act, therefore, the definition of ‘royalty’ is under the domestic law is not applicable for the purpose of understanding the concept of royalty under the Double Taxation Avoidance Agree…

The DCIT, 1(1), Bhopal vs. M/S. Andritz Hydro Pvt. Ltd., Raisen

In the result, grounds taken by the assessee in all the years with respect to provision of warranty are allowed

ITA 265/IND/2015[2010-11]Status: DisposedITAT Indore28 Feb 2017AY 2010-11

Bench: Shri D.T. Garasia & Shri O.P. Meena

Section 143(3)Section 144C

…ween the appellant and the nonresident company is of sale and purchase of goods on principal to principal basis. The meaning of ‘royalty’ has been defined in the DTAA. The Apex Court in the case of Union of India Vs Azadi Bacho Andolan and Another reported in 263 ITR 706 (SC) held that in case of difference between the provisions of the Act and the Agreement, the provisions of the Agreement would prevail over the provisions of the Act, therefore, the definition of ‘royalty’ is under the domestic law is not applicable for the purpose of understanding the concept of royalty under the Double Taxation Avoidance Agree…

M/S. Andritz Hydro Private Limited (Earlier Known As Va Tech Hydro India Private Limited), Bhopal vs. The DCIT 1(1), Bhopal

In the result, grounds taken by the assessee in all the years with respect to provision of warranty are allowed

ITA 157/IND/2015[2010-11]Status: DisposedITAT Indore28 Feb 2017AY 2010-11

Bench: Shri D.T. Garasia & Shri O.P. Meena

Section 143(3)Section 144C

…ween the appellant and the nonresident company is of sale and purchase of goods on principal to principal basis. The meaning of ‘royalty’ has been defined in the DTAA. The Apex Court in the case of Union of India Vs Azadi Bacho Andolan and Another reported in 263 ITR 706 (SC) held that in case of difference between the provisions of the Act and the Agreement, the provisions of the Agreement would prevail over the provisions of the Act, therefore, the definition of ‘royalty’ is under the domestic law is not applicable for the purpose of understanding the concept of royalty under the Double Taxation Avoidance Agree…

I.T.O WD - 7(3), Kolkata. vs. M/S Shalini Properties & Developers Private Limited., Kolkata

In the result the appeal preferred by the revenue is dismissed

ITA 171/KOL/2013[2009-10]Status: DisposedITAT Kolkata28 Feb 2017AY 2009-10

Bench: Hon’Ble Sri M.Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm] I.T.A No. 171/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-7(3) -Vs.- M/S. Shalini Properties & Developers Kolkata Pvt. Limited., Kolkata [Pan : Aahcs 7896 N] (Respondent) (Appellant) For The Appellant : Shri Arup Kumar Sinha, Cit For The Respondent : Shri Manoj Kataruka, Advocate

For Appellant: Shri Arup Kumar Sinha, CITFor Respondent: Shri Manoj Kataruka, Advocate
Section 143(3)Section 301Section 37(1)

…d’s resolution is no doubt an important piece of evidence and even though it is made by the Board of Directors, it has to be considered and taken cognizance of and cannot be brushed aside. The Supreme Court in the case of Union of India Vs Azadi Bacho Andolen 263 ITR 706 (SC) after considering the decision of the Supreme Court in the case of McDowell 154 ITR 148 made a distinction between tax avoidance and tax planning it was held :- “ having anxiously scanned MacDowerll’s case, we find no reference therein to having dissented from or overruled the decision of the Privy Council in the Bank of Chettinand case 8 IT…

Red Chillies Entertainment P. Ltd, Mumbai vs. DCIT (TDS) 3(2), Mumbai

In the result, all the appeals are partly allowed in terms of our directions contained in the orders passed in the aforesaid appeals

ITA 93/MUM/2015[2006-07]Status: DisposedITAT Mumbai28 Feb 2017AY 2006-07

Bench: Shri D.T. Garasia () & Shri Ashwani Taneja ()

Section 192Section 194Section 194JSection 201

…of income." The circulars of the CBDT are binding upon the Department. Reliance placed upon CIT v. Hero Cycles Pvt. Ltd. [228 ITR 463 (SC), 20 ITA 6655-6657/Mum/2014 ITA 92 & 93/Mum/23015 K.P. Varghese v. ITO 131 ITR 597 (SC) and UOl v. Azadi Bachao Andolan 263 ITR 706 (SC). Hon'ble Jurisdictional High Court in the case of CIT v. Siemens 4. Aktiongesellschaft [20091 310 ITR 320 (Born) held that where the provisions of the DTAA are more beneficial than provisions of the Act, the provisions of the DTAA would prevail. For Article 12 of Singapore - India DTAA to apply, technical 5. knowledge, experience, skill, kno…

Red Chillies Entertainment P. Ltd, Mumbai vs. ACIT (TDS) 3(2), Mumbai

In the result, all the appeals are partly allowed in terms of our directions contained in the orders passed in the aforesaid appeals

ITA 92/MUM/2015[2005-06]Status: DisposedITAT Mumbai28 Feb 2017AY 2005-06

Bench: Shri D.T. Garasia () & Shri Ashwani Taneja ()

Section 192Section 194Section 194JSection 201

…of income." The circulars of the CBDT are binding upon the Department. Reliance placed upon CIT v. Hero Cycles Pvt. Ltd. [228 ITR 463 (SC), 20 ITA 6655-6657/Mum/2014 ITA 92 & 93/Mum/23015 K.P. Varghese v. ITO 131 ITR 597 (SC) and UOl v. Azadi Bachao Andolan 263 ITR 706 (SC). Hon'ble Jurisdictional High Court in the case of CIT v. Siemens 4. Aktiongesellschaft [20091 310 ITR 320 (Born) held that where the provisions of the DTAA are more beneficial than provisions of the Act, the provisions of the DTAA would prevail. For Article 12 of Singapore - India DTAA to apply, technical 5. knowledge, experience, skill, kno…

Red Chillies Entertaiment P.Ltd, Mumbai vs. DCIT (TDS) 3(2), Mumbai

In the result, all the appeals are partly allowed in terms of our directions contained in the orders passed in the aforesaid appeals

ITA 6655/MUM/2014[2005-06]Status: DisposedITAT Mumbai28 Feb 2017AY 2005-06

Bench: Shri D.T. Garasia () & Shri Ashwani Taneja ()

Section 192Section 194Section 194JSection 201

…of income." The circulars of the CBDT are binding upon the Department. Reliance placed upon CIT v. Hero Cycles Pvt. Ltd. [228 ITR 463 (SC), 20 ITA 6655-6657/Mum/2014 ITA 92 & 93/Mum/23015 K.P. Varghese v. ITO 131 ITR 597 (SC) and UOl v. Azadi Bachao Andolan 263 ITR 706 (SC). Hon'ble Jurisdictional High Court in the case of CIT v. Siemens 4. Aktiongesellschaft [20091 310 ITR 320 (Born) held that where the provisions of the DTAA are more beneficial than provisions of the Act, the provisions of the DTAA would prevail. For Article 12 of Singapore - India DTAA to apply, technical 5. knowledge, experience, skill, kno…

Apl Co. Pte Ltd., Mumbai vs. ADIT (Int'L Taxation)-1(1), Mumbai

In the result, appeal of assessee is partly allowed

ITA 4435/MUM/2013[2008-09]Status: DisposedITAT Mumbai16 Feb 2017AY 2008-09

Bench: Shri G.S. Pannu & Shri Amit Shukla: (A.Y : 2008-09) Apl Co. Pte Ltd. Vs Adit(It)-1(1), Mumbai C/O Apl India Pvt. Ltd., . (Respondent) 247, Park Hincon House, B- Wing, 8Th Floor, Lbs Marg, Vikhroli (W), Mumbai 400 083 (Appellant) Pan : Aaeca1501B

For Appellant: Shri P.J. PardiwalaFor Respondent: Ms. Vandana Sagar, CIT- DR
Section 143(3)

…s income, then said position is binding on other contracting state which has been held so in the decision of the Hon'ble Gujarat High Court as aforesaid and also well-settled by the judgments of Hon'ble Supreme Court in the case of UOI vs. AzadiBachaoAndolan, 263 ITR 706(SC) and Hon'ble Madras High Court in the case of CIT vs. Lakshmi Textile Exporters Ltd., 245 ITR 521 (Mad), that certificate issued by Tax Authorities of the foreign state is binding. 9. Without prejudice to the aforesaid arguments that the conditions specified in Article 24 are not fulfilled, Mr.Pardiwalla submitted that, since the freight coll…

ACIT, New Delhi vs. Ms. Piya Singh, New Delhi

In the result, appeal is allowed partly for statistical purpose

ITA 2917/DEL/2011[2006-07]Status: DisposedITAT Delhi14 Feb 2017AY 2006-07

Bench: Sh. H.S. Sidhu & Sh. O.P. Kantassessment Year: 2006-07 Vs. Ms. Piya Singh, 15, Aurangzeb Acit, Circle-47(1), 426, Mayur Bhavan, New Delhi Road, New Delhi Pan : Apdps6582D (Appellant) (Respondent) Appellant By Sh. F.R. Meena, Sr.Dr Respondent By Sh. Rupesh Jain, Adv. & Sh. Deepesh Jain, Ca Date Of Hearing 03.01.2017 Date Of Pronouncement 14.02.2017 Order Per O.P. Kant, A.M.: This Appeal By The Revenue Is Directed Against Order Dated 29/03/2011 Of Learned Commissioner Of Income-Tax (Appeals)-Xxx, New Delhi For Assessment Year 2006-07, Raising Following Grounds: “I) Deleting The Assessing Officer To Allow The Long Term Capital Loss & Thereby Deleting The Addition Of Rs.2,09,90,799/- Made By The Ao On Account Of Long Term Capital Gain On Sale Of Apartment: Ii) Concluding The Fact That The Assessee Incurred Capital Loss First In Point Of Time & Capital Gains Were Arrived At Much Later Date Not Considering That It Was Not Only On 01.03.2006 I.E. On The Date Of Sale That The Assessee Came To Know That She Was Going To Earn Profit On Her Investment In The Apartment Rather It Was Well Within Her Knowledge That The Value Of Investment In The Property Was Appreciating & As She Invested In The Property Only For The Purpose Of Earning Profit, The Sale Of Shares Seven Months Before

…d not be considered as fraudulent or colourable device, as far as the transaction is valid in law. Before the Commissioner (A) the assessee relied on the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Azadi Bachao Andolan and Another (263 ITR 706). The Hon’ble Apex Court in the said judgement has held that merely because a transaction is entered into by an assessee with a motive to save tax, the transaction cannot be regarded or called as a colourable device so long as the transaction is valid in law. Moreover, when the transaction is within the parameters of law then the income-tax autho…

Sh Chand Rattan Bagri, New Delhi vs. ACIT, New Delhi

In the result ground No. 5

ITA 2125/DEL/2010[2006-07]Status: DisposedITAT Delhi13 Jan 2017AY 2006-07

Bench: Shri I.C.Sudhir & Shri Prashant Maharishichand Rattan Bagri, Acit, 4318/3, Ansari Road, Circle-3(1), Vs. Darya Ganj, New Delhi Cr Building, Ip Estate, Pan:Aagpb1216K New Delhi (Appellant) (Respondent) Chand Rattan Bagri, Acit, 4318/3, Ansari Road, Circle-3(1), Vs. Darya Ganj, New Delhi Cr Building, Ip Estate, Pan:Aagpb1216K New Delhi (Appellant) (Respondent)

For Appellant: Sh. CS Aggarwal, Sr. AdvFor Respondent: Sh. Anil Kr. Sharma, Sr. DR
Section 271Section 271(1)(c)

…submitted that there is no material for the Assessing Officer to hold that the transaction by the assessee is a colorable device. In this regard, Ld. Counsel of the assessee placed decision of the Hon'ble Apex Court in the case of Azadi Bachao Andolan vs. UOI 263 ITR 706. 6.1 The Ld. Counsel of the assessee further submitted that the Assessing Officer has invoked the provision of section 28(iv) of the I.T. Act. He submitted that such section is not applicable in this case. He also submitted that the aforesaid provision is applicable in respect of the value of any benefit or perquisite, whether convertible into mo…

Capgemini Sa, Mumbai vs. DCIT (It) 2(1)(1), Mumbai

ITA 6323/MUM/2016[2013-14]Status: DisposedITAT Mumbai09 Jan 2017AY 2013-14

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Years: 2013-14 Capgemini Sa, Dcit(International Taxation)- Kalyaniwalla & Mistry, 2(1)(1), बनाम/ 3Rd Floor, Army & Navy Room No.1713, 17Th Floor, Vs. Building, Air India Building, 148, M.G. Road,Fort, Marine Drive, Mumbai-400001 Mumbai-400021 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aadcc5353J "नधा"रती क" ओर से / Assessee By Shri M.M. Golvala & Shri Raunak Vardhan राज"व क" ओर से / Revenue By Shri Jasbir Chouchan Cit-Dr

Section 5Section 9Section 90(2)

…to the extent to which they were beneficial to it, and, therefore, there was no necessity to consider the Double Tax Avoidance Agreement (DTAA), between India and France. This is a legal principle approved by the Supreme Court in UOI vs. Azadi Bachao Andolan 263 ITR 706 and in CIT vs. P.V.A.L. Kulandagan Chettiar 267 ITR 654. ii. Without prejudice to the contention of the assessee that there was no income liable to tax under the Income-tax Act, 1961, it was contended, in the alternative, that the character of the income earned by the appellant was "business" income and, therefore, under the DTAA between India an…