“tax treaty”

Chapter X-A - GAARSection 102(11)Section 102(11)1,494 judgments

The decision most relied on for tax treaty is Union of India v. Azadi Bachao Andolan (263 ITR 706), cited in 691 judgments on BharatTax.

Leading authorities on tax treaty

Union of India v. Azadi Bachao Andolan

263 ITR 706 · 2003 · Supreme Court

691

citing judgments

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.

Asia Satellite Telecommunications Co. Ltd. v. DIT

332 ITR 340 · 2011 · High Court

359

citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

DIT v. New Skies Satellite BV

382 ITR 114 · 2016 · High Court

325

citing judgments

An amendment to the Income Tax Act, such as the Finance Act, 2012 amendment to Section 9(1)(vi) defining royalty, does not automatically override or alter the definition of 'royalty' as provided in a Double Taxation Avoidance Agreement (DTAA) unless the DTAA itself is bilaterally amended. The definition of royalty in a DTAA remains unaffected by unilateral changes to domestic law.

India Vs. Azadi Bachao Andolan 263 ITR 706 (SC); and Vodafone International Holdings B.V v. Union of India

341 ITR 1 · 2012 · Supreme Court

295

citing judgments

Legitimate tax planning is permissible, allowing taxpayers to arrange their affairs to minimize tax liabilities while respecting the "look at test" for transaction genuineness and the separate entity principle in corporate taxation. The source of funds for treaty-beneficial structures does not automatically invalidate the transaction.

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

Motorola Inc. v. Dy. CIT

95 ITD 269 · 2005 · High Court

213

citing judgments

Revenue must demonstrate the existence of a Permanent Establishment (PE) of a foreign enterprise in India, including establishing that transactions underlying a Dependent Agent PE were not at arm's length. Income from the sale of goods is not taxable in India if title and risk in the goods pass outside India.

(i) Formula One World Championship Ltd. v. CIT

394 ITR 80 · 2017 · Supreme Court

200

citing judgments

This case provides foundational principles that illuminate the contours of the concept of 'Permanent Establishment' (PE) under tax treaties, especially regarding a 'fixed place' PE.

DIT v. Guy Carpenter & Co Ltd.

346 ITR 504 · 2012 · High Court

171

citing judgments

For fees for technical services to be taxable under a tax treaty's 'make available' clause, a transfer of technology enabling the recipient to independently perform the service in the future is necessary, beyond mere service rendition. The case also clarifies that re-insurance services do not constitute 'imparting' of information taxable as royalty.

Judgments citing tax treaty

Alexandria Real Estate Cyprus No. 1 Limited, Nicosia, Cyprus vs. DCIT, Circle-1(1)(1), New Delhi

In the result, appeal of the assessee is dismissed

ITA 5052/DEL/2019[2014-15]Status: DisposedITAT Delhi20 Jun 2023AY 2014-15

Bench: Shri Kul Bharat & Shri M. Balaganesh

For Appellant: NoneFor Respondent: Shri Vizay B. Vasanta, CIT(DR)

Section 143(3)Section 147Section 263

that the Assessment Order was passed, after making due enquiries and verification of records. 3. Denial of benefit, available to the Appellant, under the Tax Treaty between India and Cyprus 3.1 On the facts and circumstances of the case and in law, the Ld. CIT erred in concluding that ... Appellant is not entitled to the benefit of the Tax Treaty between India and Cyprus. Page 2 of 8 ITA No.-5052/Del/2019 M/s Alexandria Real Estate Cyprus 3.2 On the facts and circumstances of the case and in law, the Ld. CIT has not brought on any evidence

Maersk Logistics & Services International B.V, Mumbai vs. Dy. Commissioner of Income Tax (International Taxation) Circle-3(2)(1), Mumbai

In the result, the appeals of the assesse are partly allowed

ITA 937/MUM/2023[2020-21]Status: DisposedITAT Mumbai19 Jun 2023AY 2020-21

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.909 & 937/Mum/2023 (A.Ys. 2017-18 & 2020-21)

For Appellant: Manish KanthFor Respondent: Chandip Singh

Section 144CSection 148Section 234BSection 270A(2)

company incorporated in the Netherland and is a tax resident of Netherland for tax purposes in terms of Article 4 of the India-Netherland Tax Treaty. During A.Y. 2017-18, Damco BV did not have any place of business (i.e branch office or any other palce of management in India ... further it did not satisfy any other conditions specified in Article 5 of the Tax Treaty in relation to constitution of Permanent Establishment (PE) in India. The assessee explained that assessee act as central coordinator for the provision of P a g e | 4 ITA Nos. 909 & 937/Mum/2023 Maersk Logistics

Maersk Logistics & Services International B.V., Mumbai vs. Dy. Commissioner of Income Tax International Taxation Circle-3(2)(1), Mumbai

In the result, the appeals of the assesse are partly allowed

ITA 909/MUM/2023[2017-18]Status: DisposedITAT Mumbai19 Jun 2023AY 2017-18

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.909 & 937/Mum/2023 (A.Ys. 2017-18 & 2020-21)

For Appellant: Manish KanthFor Respondent: Chandip Singh

Section 144CSection 148Section 234BSection 270A(2)

Factiva Ltd. C/O. Price Waterhouse & Co. Lltp, Mumbai vs. Dy.Comm of Income Tax (International Taxation)-2(3)(1), Mumbai

In the result, the appeals of the assessee are allowed

ITA 1505/MUM/2022[2019-20]Status: DisposedITAT Mumbai19 Jun 2023AY 2019-20

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.1504 & 1505/Mum/2022 (A.Ys. 2018-19 & 2019-20)

For Appellant: Hirali Desai &For Respondent: Soumendu Kumar Dash

Section 143(2)Section 195Section 270ASection 274Section 9(1)(vi)

totalling to Rs.608,88,436/ as royalty income and taxable u/s 9(1)(vi) of the Act r.w. Article 13(3)(a) of the Tax Treaty between India and UK. The draft assessment order was passed by the assessing officer on 28.06.2021. 5. Against the draft assessment order the assessee ... Court in the case of Union of India Vs. Azadi Bachao Andalon 263 ITR 706. Accordingly, we will consider the beneficial provisions of the tax treaty to see whether the contention of the assessee that the alleged payment from DJCIPL is not royalty income. 11. As per Article

Factiva Ltd. C/O. Price Waterhouse & Co. Lltp, Mumbai vs. Dy.Comm of Income Tax (International Taxation)-2(3)(1), Mumbai

In the result, the appeals of the assessee are allowed

ITA 1504/MUM/2022[2018-19]Status: DisposedITAT Mumbai19 Jun 2023AY 2018-19

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailita Nos.1504 & 1505/Mum/2022 (A.Ys. 2018-19 & 2019-20)

For Appellant: Hirali Desai &For Respondent: Soumendu Kumar Dash

Section 143(2)Section 195Section 270ASection 274Section 9(1)(vi)

Financiere Cvt (Now Ge Energy Power Conversion Group), Gurgaon vs. ACIT, Circle (1)(3)(1), International Taxation, New Delhi

In the result, appeal is allowed

ITA 7736/DEL/2019[2016-17]Status: DisposedITAT Delhi16 Jun 2023AY 2016-17

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2016-17 Financiere Cvt (Now Ge Energy Versus Acit, Circle 1(3)(1), Power Conversion Group), 6Th International Taxation, Floor, Building 7A, Dlf Cyber New Delhi. City, Phase-3, Gurgaon. Pan: Aabcf6233C) (Appellant) (Respondent)

For Appellant: Sh. Ravi Sharma, Advoate &For Respondent: Sh. S.N. Pandey, Sr. DR

following observations of the coordinate Bench are reproduced here under: “19. It would be pertinent to refer to Article -13 of the India UK Tax Treaty which is as under :- "For the purposes of paragraph 2 of this Article, and subject to paragraph 5, of this Article, the term fees ... term “managerial” and further existence of the “make available” condition are embedded therein. 14 21. In our understanding under the India UK tax treaty for a payment to quality as FTS both the following conditions need to be cumulative satisfied : (i) The services need to be “technical” or “consultancy

Micro Focus Software Inc. (Formerly Known As Novell Inc.), Mumbai vs. The Dy CIT (Intl. Taxation)-Circle-3(2)(2), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

ITA 891/MUM/2023[2020-21]Status: DisposedITAT Mumbai14 Jun 2023AY 2020-21

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Ketan VedFor Respondent: Shri Soumendu Kumar Dash

Section 143(3)Section 144C(13)Section 144C(5)

Banker, a well known international tax lawyer, has all along advocated zero-sum approach, late Klaus Vogel touched a different chord, in his column 'Tax Treaty Monitor' in the 'Bulletin for International Taxation (November 2007 at page 475) and given his approval for "two taxpayers approach". The latter is also ... unit in this transaction is the DA itself, but this taxability is in respect of the remuneration of the DA. The provisions of the tax treaty are silent on this issue, and rightly so, because the taxability of the DA is quite distinct of the taxability of the enterprise

M/S Tricon Global Services Private Limited, Mumbai vs. Dy. Commissioner of Income Tax, CPC, Bengaluru

In the result, the appeal of the assessee is dismissed

ITA 2985/MUM/2022[2020-20]Status: DisposedITAT Mumbai13 Jun 2023AY 2020-20

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2020-2021 M/S Tricon Global Services Dy. Cit, Cpc Private Limited, Bengaluru-560100 701, Dlh Park, S.V. Road, Off Vs. Mtnl, Goregaon (West), Mumbai-400062. Pan No. Aabco 0321 L Appellant Respondent

For Appellant: Mr. Madhur Agrawal, ARFor Respondent: Ms. Richa Gulati, DR

Section 10(34)Section 115Section 40Section 90(2)

wherever the Contracting States to a tax DTAAs. Thus, wherever the Contracting States to a tax DTAAs. Thus, wherever the Contracting States to a tax treaty intend to extend the treaty protection to the treaty intend to extend the treaty protection to the treaty intend to extend the treaty protection

DCIT Cir 6(3), Mumbai vs. M/S. Grasim Industries Ltd., Mumbai

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

ITA 5978/MUM/2004[2003-2004]Status: DisposedITAT Mumbai13 Jun 2023AY 2003-2004

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri J.D. Mistry a/wFor Respondent: Dr. Kishore Dhule

Section 142(1)Section 143(3)Section 250Section 43BSection 80Section 80H

preceding assessment years, wherein it was held that income of the foreign branch office is not taxable in India as per the relevant tax treaty. During the hearing, the learned Sr. Counsel, appearing for the assessee, submitted that sub-section (3) was inserted in section 90 of the Act vide ... exercise of powers conferred by section 90(3) of the Act, whereby the meaning of the term “may be taxed” used in the tax treaty was clarified, is also not applicable to the year under consideration. On the other hand, the learned DR submitted that this issue be remanded

Grasim Industries Ltd., Mumbai vs. DCIT Range 6(3), Mumbai

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

ITA 4754/MUM/2004[2003-04]Status: DisposedITAT Mumbai13 Jun 2023AY 2003-04

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri J.D. Mistry a/wFor Respondent: Dr. Kishore Dhule

Section 142(1)Section 143(3)Section 250Section 43BSection 80Section 80H

Nuovo Pignone International Srl, Gurgaon vs. DCIT, Circle-2(2)(2), Delhi

In the result, appeal is allowed as indicated above

ITA 999/DEL/2022[2018-19]Status: DisposedITAT Delhi13 Jun 2023AY 2018-19

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2018-19 Nuovo Pignone International Versus Dcit, Circle 2(2)(2), Srl, 6Th Floor, Building No. 7A, International Taxation, Standard Chartered Building, New Delhi Dlf Cyber City, Phase-Iii, Gurgaon. Pan: Aabcg3212A (Appellant) (Respondent)

For Appellant: Sh. Sachit Jolly, Advocate &For Respondent: Sh. Virendra Singh, Sr. DR

Section 133ASection 143(3)Section 144C(13)

determined on year to year basis, as the existence of PE has to be decided based on the definition of PE in the relevant tax treaty. Merely because in one year, the assessee had a PE in India, that by itself cannot lead to the conclusion that the assessee must

Qualcomm Incorporated, Hyderabad vs. DCIT, Circle- 3(1)(1), Intl. Taxation, New Delhi

The appeal of the assessee is allowed

ITA 7559/DEL/2018[2015-16]Status: DisposedITAT Delhi13 Jun 2023AY 2015-16

Bench: Shri G.S. Pannu & Shri Saktijit Dey

For Appellant: Sh. Percy J. Pardiwala, Sr. CounselFor Respondent: Sh. Gangadhar Panda, CIT(DR)

Section 143(3)Section 144C(13)Section 9(1)(vi)

light of the limited facts on record, the taxability of impugned royalties in terms of the provisions of the Indo US tax treaty as well. Directions in Para- 99- For the reasons set out above, we are of the considered view that further examination about certain basic facts

Qualcomm Incorporated, Usa vs. DCIT, Circle- 3(1)(1), Intl. Taxation, New Delhi

The appeal of the assessee is allowed

ITA 7894/DEL/2017[2014-15]Status: DisposedITAT Delhi13 Jun 2023AY 2014-15

Bench: Shri G.S. Pannu & Shri Saktijit Dey

For Appellant: Sh. Percy J. Pardiwala, Sr. CounselFor Respondent: Sh. Gangadhar Panda, CIT(DR)

Section 143(3)Section 144C(13)Section 9(1)(vi)

Cma Cgm Sa, Mumbai vs. Assistant Commissioner of Income Tax, (International Taxation) Circle 2(1)(1), Mumbai

In the result, additional grounds of appeal filed by the assessee are allowed for statistical purpose

ITA 833/MUM/2023[2020-21]Status: DisposedITAT Mumbai12 Jun 2023AY 2020-21

Bench: Shri Vikas Awasthy & Shri Gagan Goyal आअसं. 833/मुं/2023 ("न.व. 2020-21) Cma Cgm Sa C/O. Cma Cgm Agencies (India) Private Limited, Indiabulls Finance Centre, Tower -3, 8Th Floor, Senapati Bapat Marg, Elphinstone(W), Mumbai – 400 013. Pan: Aabcc-9048-G ...... अपीलाथ" /Appellant बनाम Vs. The Asstt. Commissioner Of Income Tax (International Taxation) 2(1)(1)Mumbai Room No.1713, 17Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri Rajesh Poojari & Ms. Jasmin Amalsadvala ""तवाद" "वारा/Respondent By : Shri Soumendu Kumar Dash सुनवाई क" "त"थ/ Date Of Hearing : 31/05/2023 घोषणा क" "त"थ/ Date Of Pronouncement : /06/2022 आदेश/ Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Assessment Order Dated 19/01/2023 Passed U/S. 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 [ In Short ‘The Act], For The Assessment Year 2020-21. 2 2. In Appeal The Assessee Has Raised 22 Grounds. The Gist Of Grounds Of Appeal Is As Under:

For Appellant: Shri Rajesh Poojari &For Respondent: Shri Soumendu Kumar Dash

Section 143(3)Section 234ASection 234BSection 270

categorically held that the revenue earned from IHC is part of shipping business in International Waters, hence, covered under Article–9 of the Tax Treaty. However, subsequently, while deciding the identical issue in assessee’s own case for the assessment years 2013– 14 and 2014–15, learned DRP took ... hold that IHC, since, forms part of income from operation of ships in International Traffic, is covered under Article–9 of the India–France Tax Treaty, accordingly, not taxable in India. These grounds are decided allowed.” No contrary material has been brought on record distinguishing facts or the aforesaid decision

Smit Singapore Pte Ltd, Mumbai vs. Deputy Commissioner of Income Tax(Int Taxation)-4(2)(1), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

ITA 816/MUM/2023[2020-2021]Status: DisposedITAT Mumbai12 Jun 2023AY 2020-2021

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur Agrawal a/w Ms. Miti ShahFor Respondent: Shri Chandip Singh

Section 142(1)Section 143(2)Section 143(3)Section 144C(5)Section 234Section 234ASection 234BSection 270ASection 44BSection 9(1)(vi)

clause (iva) of the 'Explanation 2' to Sec. 9(1)(vi) of the Act, and also Article 12(3)(b) of the India-Singapore tax treaty; (ii) that, as to whether or not the A.O/DRP are right in law and the facts of the case in treating the mobilisation fees ... received by the assessee as 'royalty', both under the Act, as well as the India-Singapore tax treaty; and (iii) that, as to whether or not the A.O/DRP are justified in treating the consideration received by the assessee towards reimbursement of expenses from Leighton India Contractor Pvt. Ltd., as royalty

Sapein Funds Ltd., Mauritius vs. CIT (International Taxation) Delhi-3, New Delhi

In the result, the appeal of the assessee is allowed

ITA 976/DEL/2022[2017-18]Status: DisposedITAT Delhi08 Jun 2023AY 2017-18

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Salil Kapoor, Adv. &For Respondent: Sh. Vizay Vasanta, CIT-DR

Section 143(3)Section 263

meet the definition of “liable to tax” in order to qualify as a resident of a contracting state for the purposes of tax treaties. As a general rule, domestic tax laws of several countries treat the income and gains of CIV as arising directly to the Investors ... itself. In short, the CIV is treated like a transparent entity. As a result, CIV does not get entitled to the benefits of tax treaties. Therefore, OECD Commentary to Article 1 (2017) in para 31 recommends that the contracting states should publicize their position on this issue bilaterally either

DCIT 16(2), Mumbai vs. M/S. Bsr and Co. LLP, Mumbai

In the result ITA No. 723/Mum/2023 is dismissed, ITA No

ITA 723/MUM/2023[2014-15]Status: DisposedITAT Mumbai06 Jun 2023AY 2014-15

Bench: Shri Vikas Awasthy & Shri Gagan Goyal

For Appellant: Sh. Soumendu Kumar Das, Sr. DRFor Respondent: Sh. Ajit Kumar Jain CA &

Section 142(1)Section 40Section 90

made to the Netherlands entity at Sr. No. 7, the services are in the nature of business profits under Article 7 of the respective tax treaties and are not taxable in India in the absence of permanent establishment of non – residents in India under Article 5 of the said tax ... process. (b) In the case of payment made to Israel entity at Sr. No. 3, it was pointed out that the Israel tax treaty is similar to Ireland tax treaty and the services cannot be construed as managerial or technical services so as to be governed by article

Asst CIT Cir 2(2)(1), Mumbai vs. State Bank of India, Mumbai

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

ITA 4564/MUM/2016[2009-10]Status: DisposedITAT Mumbai06 Jun 2023AY 2009-10

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: S/Shri P.J. Pardiwala a/w Ninad PatadeFor Respondent: Ms. Surabhi Sharma

Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)Section 36(1)(vii)Section 36(1)(viia)

Officer to not tax the income earned by the foreign branches of the appellant, based in countries with whom India has entered into a tax treaty. 14.3 The learned CIT(A) erred in not directing the Assessing Officer to verify and allow the claim of the appellant. 14.4 The learned

State Bank of India, Mumbai vs. Addl CIT RG 2(2), Mumbai

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

ITA 3645/MUM/2016[2009-10]Status: DisposedITAT Mumbai06 Jun 2023AY 2009-10

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: S/Shri P.J. Pardiwala a/w Ninad PatadeFor Respondent: Ms. Surabhi Sharma

Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)Section 36(1)(vii)Section 36(1)(viia)

Vijayakumar Kanaiyalal Matta, Mumbai vs. ITO 26 (3)(4), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 53/MUM/2020[2014-15]Status: DisposedITAT Mumbai31 May 2023AY 2014-15

Bench: Shri Vikas Awasthy & Shri Amarjit Singhvk-Vk-La- 52@Eaqcbz@2020 ¼Fu-Oa- 2013&14½ Vk-Vk-La- 53@Eaqcbz@2020 ¼Fu-Oa- 2014&15½ Vijaykumar Kanaiyalal Matta 8/B/104, 10Th Floor, S. S. Nagar, Sion Koliwada, Sion Mumbai-400 037 ..... Vihykfkhz/Appellant Pan No. Aropm6060D Cuke Vs. Income Tax Officer – 26(3) (4) Room No.507, 5Th Floor, Pratyaksha Kar Bhawan, B. K. C. Bandra (E), ..... Izfroknh/Respondent Mumbai-400 051

For Appellant: Shri Tejveer Singh, AdvocateFor Respondent: Shri Abhishek Kumar Singh, Sr. AR

Section 131Section 147Section 148Section 69

under which this income can be brought to tax in the hands of the assessee- in terms of the provisions of the Indo UAE tax treaty, as there is no dispute that the assessee is, being resident in and fiscally domiciled in the UAE, entitled to the benefits ... Indo UAE tax treaty. We are right now dealing with an assessment year in which tax residency certificate was not even mandatory, but quite fairly, that aspect has not even been raised before us. Coming to the taxability under the Indo UAE tax treaty, such an income is not specifically