“Section 90(1)(c)”
The decision most relied on for Section 90(1)(c) is CIT v. P.V.A.L. Kulandagan Chettiar (267 ITR 654), cited in 85 judgments on BharatTax.
Leading authorities on Section 90(1)(c)
This case established a principle regarding the application of Double Taxation Avoidance Agreements (DTAAs) versus domestic tax law, particularly concerning the use of more beneficial provisions for an assessee, though its specific impact has been nullified by subsequent legal amendments.
The interpretation of the term 'royalty' as defined in tax treaties is not influenced by India's subsequent changes in position to the OECD Commentary or by executive actions. A treaty between sovereign states cannot be unilaterally amended by domestic law or executive policy without incorporating such changes into the treaty itself.
An assessee has the option to choose between the provisions of the Income-tax Act and a Double Taxation Avoidance Agreement (DTAA) in any given year, and the non-election of DTAA benefits in one year does not prevent claiming them in subsequent years.
Expenditure is laid out wholly and exclusively for the purposes of trade or business when it is incurred by the assessee as incidental to their trade, for the purpose of keeping the trade going and making it pay, and not in any other capacity than as a trader.
Indirect expenses not directly relatable to an industrial undertaking cannot be considered for computing income eligible for deduction under Section 80-1A. The income and expenditures to be reckoned for this deduction must be directly related to the industrial unit.
Dividend income derived by an Indian resident from a foreign company is not liable to be taxed in India if the applicable Double Taxation Avoidance Agreement (DTAA) provides for such exemption.
A CBDT notification issued under section 90(3) of the Income-tax Act is clarificatory in nature and effective from April 1, 2004, the date section 90(3) was introduced.
A notification issued under section 90(3) may supersede a Double Taxation Avoidance Agreement (DTAA) between India and another country, depending on its effective date. The taxability of income from immovable property under a DTAA, read with a relevant notification, is a key issue.
