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“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

Owens Corning (Singapore) Pte. Ltd., Mumbai vs. Dy. CIT (It) Circle-3 (2)(2), Mumbai

In the result, the ITA No

ITA 5731/MUM/2019[2016-17]Status: DisposedITAT Mumbai06 Jul 2022AY 2016-17

Bench: Us Is A Company Incorporated In & Fiscally Domiciled In, The Republic Of Singapore. During The Relevant Previous Year, The Assessee Company Provided Bushing & Fabrication Services To Its

Section 143(3)

first take note of the related provisions of the India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (Stat) 1; Indo Singapore tax treaty, in short], which were, at the relevant point of time, as follows: Article 9- ASSOCIATED ENTERPRISE Where— (a) an enterprise of a Contracting State participates directly ... other provisions of this Agreement. 10. There is no dispute that the assessee is entitled to the benefits of the Indo-Singapore tax treaty, that the assessee does not have any permanent establishment in India, and that, accordingly, income earned by the assessee cannot be taxed as business profits under

Owens-Corning(Singapore)Pte.Ltd., Mumbai vs. The Deputy Commissioner of Income-Tax (Internatioal Taxation) Circle-3(2)(2), Mumbai

In the result, the ITA No

ITA 2049/MUM/2016[2012-13]Status: DisposedITAT Mumbai06 Jul 2022AY 2012-13

Bench: Us Is A Company Incorporated In & Fiscally Domiciled In, The Republic Of Singapore. During The Relevant Previous Year, The Assessee Company Provided Bushing & Fabrication Services To Its

Section 143(3)

first take note of the related provisions of the India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (Stat) 1; Indo Singapore tax treaty, in short], which were, at the relevant point of time, as follows: Article 9- ASSOCIATED ENTERPRISE Where— (a) an enterprise of a Contracting State participates directly ... other provisions of this Agreement. 10. There is no dispute that the assessee is entitled to the benefits of the Indo-Singapore tax treaty, that the assessee does not have any permanent establishment in India, and that, accordingly, income earned by the assessee cannot be taxed as business profits under

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 5025/MUM/2004[1999-2000]Status: DisposedITAT Mumbai05 Jul 2022AY 1999-2000
Section 143(3)

under article 13(3)(a) of the then applicable India United Kingdom Double Taxation Avoidance Agreement dated 26th October 1993 (the applicable Indo-UK tax treaty, in short). The Assessing Officer also relied upon the decision of the Hon‟ble Authority of Advance Ruling ... will be liable to tax, in respect of the same, as „fees for technical services‟ under section 13(3)(b) of the Indo UK tax treaty. The Assessing Officer rejected the plea that these revenues are in the nature of the business profits, and as the assessee did not have

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 5024/MUM/2004[1998-1999]Status: DisposedITAT Mumbai05 Jul 2022AY 1998-1999
Section 143(3)

under article 13(3)(a) of the then applicable India United Kingdom Double Taxation Avoidance Agreement dated 26th October 1993 (the applicable Indo-UK tax treaty, in short). The Assessing Officer also relied upon the decision of the Hon‟ble Authority of Advance Ruling ... will be liable to tax, in respect of the same, as „fees for technical services‟ under section 13(3)(b) of the Indo UK tax treaty. The Assessing Officer rejected the plea that these revenues are in the nature of the business profits, and as the assessee did not have

Refinitiv Ltd., Mumbai vs. DCIT (I.T) 2(1), Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 4997/MUM/2004[1999-2000]Status: DisposedITAT Mumbai05 Jul 2022AY 1999-2000
Section 143(3)

under article 13(3)(a) of the then applicable India United Kingdom Double Taxation Avoidance Agreement dated 26th October 1993 (the applicable Indo-UK tax treaty, in short). The Assessing Officer also relied upon the decision of the Hon‟ble Authority of Advance Ruling ... will be liable to tax, in respect of the same, as „fees for technical services‟ under section 13(3)(b) of the Indo UK tax treaty. The Assessing Officer rejected the plea that these revenues are in the nature of the business profits, and as the assessee did not have

Refinitiv Ltd., Mumbai vs. DCIT (I.T) RG. 2, Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 4996/MUM/2004[1998-1999]Status: DisposedITAT Mumbai05 Jul 2022AY 1998-1999
Section 143(3)

under article 13(3)(a) of the then applicable India United Kingdom Double Taxation Avoidance Agreement dated 26th October 1993 (the applicable Indo-UK tax treaty, in short). The Assessing Officer also relied upon the decision of the Hon‟ble Authority of Advance Ruling ... will be liable to tax, in respect of the same, as „fees for technical services‟ under section 13(3)(b) of the Indo UK tax treaty. The Assessing Officer rejected the plea that these revenues are in the nature of the business profits, and as the assessee did not have

Owens Corning Inc., Mumbai vs. The Dy CIT(International Tax)Circle-3(2)(2), Mumbai

In the result, appeal by the assessee is allowed for statistical purpose

ITA 741/MUM/2021[2017-18]Status: DisposedITAT Mumbai04 Jul 2022AY 2017-18

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Sandeep Bhalla a/wFor Respondent: Shri Milind Chavan, Sr. DR
Section 143(3)Section 144Section 234BSection 9(1)Section 9(1)(vii)

Income-tax Act, 1961 ('the Act') as well as Article 12 of the Double Taxation Avoidance Agreement entered between India and USA ('India-USA Tax Treaty'). 2. The Appellant submits that considering the facts and circumstances of the case and the law prevailing on the subject, the lease rentals received ... royalty' either under the Act or under the provisions of the India-USA Tax Treaty. The stand taken by the AO/ DRP in this regard is erroneous, misconceived and not in accordance with the law. 3. The Appellant submits that the AO be directed to delete the addition

Michael Page International Pte Ltd., Mumbai vs. Dy CIT (Intl. Taxn.)-3(2)(2), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 144/MUM/2021[2017-18]Status: DisposedITAT Mumbai04 Jul 2022AY 2017-18
Section 143(3)Section 270ASection 9(1)

recruitment services. The assessee is entitled to the benefits of the India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (Statute) 1; Indo- Singapore tax treaty, in short]. During the relevant previous year, the assessee received Rs 3,06,12,626, from its Indian associated enterprise by the name ... Indian entity, i.e. MP-India, does not amount to „making available‟ the services so rendered, in terms of Article 12 of the Indo Singapore tax treaty, it cannot be taxed in India. The Assessing Officer was not impressed with this claim of the assessee, and the Assessing Officer required

Ntt Asia Pacific Holdings Pte. Ltd., Mumbai vs. The Asstt. CIT (International Taxation)-2(1)(2), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 1212/MUM/2021[AADC4348L]Status: DisposedITAT Mumbai04 Jul 2022
Section 143(3)

Singapore. The assessee is entitled to the benefits of the India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (Statute)1; Indo- Singapore tax treaty, in short]. During the relevant previous year, the assessee received Rs 121,94,85,623, from its Indian associated enterprise by the name of Dimensions ... Page 3 of 10 4. The claim of the assessee was in view of the make available clause in the Indo Singapore tax treaty, and in view of the fact that the said clause was not satisfied on the facts of the present case, no part of the amount

Anl Singapore Pte Ltd., Mumbai vs. Dy CIT (International Taxationa)-1(1)(2), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 1014/MUM/2021[2017-18]Status: DisposedITAT Mumbai04 Jul 2022AY 2017-18

Bench: Us Is A Company Incorporated In & Fiscally Domiciled In, The Republic Of Singapore & Is Engaged In The Shipping Business. The Assessee Had Earnd An Inland Haulage Charges Of Rs 13,32,16,141 Which Was Not Offered To Tax. When, During The Course Of The Assessment Proceedings, It Was Put To The Assessee As To Why The Said Income Not Be Brought To Tax In The Hands Of The Assessee, It Was, Inter Alia, Submitted By The Assessee As Follows: Assessment Year: 2017-18 Page 2 Of 5

Section 143(3)

assessee are covered by the scope of article 8 of the India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (Statute)1; Indo- Singapore tax treaty, in short], and are, as such, taxable only in Singapore. 3. The issue in appeal lies in a very narrow compass of material facts ... above in respect of point no. 4 i.e. ancillary charges, Inland Haulage Charges are also covered within the ambit of Article 80f India Singapore Tax Treaty. Inland Haulage Activity consists of carrying the cargo from Port of Discharge to the final place of destination in case of Imports and carrying

Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore vs. M/S Altisource Business Solutions India Pvt Ltd, Bangalore

In the result, the appeal filed by assessee stands allowed as indicated hereinabove and appeal filed by revenue stands dismissed

ITA 164/BANG/2018[2012-13]Status: DisposedITAT Bangalore29 Jun 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 162/Bang/2018 Assessment Year : 2012-13 M/S. Altisource Business Solutions Pvt. Ltd., Pritech Park, 3Rd & 5Th Floors Of Wing A & The Deputy 4Th Floor Of Wing B, Commissioner Of Block No. 12, Pritech Park, Income Tax, Survey No. 51-64/4, Circle – 1 (1)(2), Bellandur Village, Bangalore. Vs. Sarjapur Marathahalli Outer Ring Road, Bangalore – 560 103. Pan: Aaaco9467A Appellant Respondent & It(Tp)A No. 164/Bang/2018 Assessment Year : 2012-13 (By Revenue) : Shri K.R. Vasudevan, Assessee By Advocate : Smt. Susan Dolores George Revenue By Cit (Osd) Date Of Hearing : 30-05-2022 Date Of Pronouncement : 29-06-2022 Order Per Beena Pillaipresent Cross Appeals Filed By The Assessee & The Revenue Against Order Dated 31.08.2017 Passed By The Ld.Cit(A)-1, Bangalore For A.Y. 2012-13 On Following Grounds Of Appeal:

Section 92C(3)(a)

learned AO/CIT(A) ought to have observed that on the said expense, no TDS was required to be deducted as per the tax treaty of India with the respective countries of the payees. 12.3 Notwithstanding and without prejudice to the above, the learned AO/CIT(A) ought to have appreciated that ... relates to hardware support and technical services which are not subject to tax based on the tax treaties with the respective countries of payees. 12.5 Notwithstanding and without prejudice to the above, the learned AO/CIT(A) has erred in not appreciating the fact that explanation 5 to section Page

DCIT (It) -4(1) (1), Mumbai vs. Renaissance Services Bv, Mumbai

1758/Mum/2021 2013-14

ITA 1759/MUM/2021[2015-16]Status: DisposedITAT Mumbai27 Jun 2022AY 2015-16
Section 143(3)Section 9(1)(vi)Section 9(1)(vii)

under section 9(1)(vii) of the Income-tax Act, 1961 (the Act) as well as under Article 12(5) of the India-Netherlands tax treaty; 2. The Ld' CIT(A) erred in holding that the amount of Rs 9,47,56,685 received by the Assessee on account ... nature of royalty under section 9(1)(vi) of the Act respectively as well as under Article 12 of the India-Netherlands tax treaty; 3. The Ld' CIT(A) erred In holding that the amount of Rs 1,83,37,856 received towards human resources related costs incurred

DCIT (It) -4 (1) (1), Mumbai vs. Renaissance Services Bv, Mumbai

1758/Mum/2021 2013-14

ITA 1758/MUM/2021[2013-14]Status: DisposedITAT Mumbai27 Jun 2022AY 2013-14
Section 143(3)Section 9(1)(vi)Section 9(1)(vii)

under section 9(1)(vii) of the Income-tax Act, 1961 (the Act) as well as under Article 12(5) of the India-Netherlands tax treaty; 2. The Ld' CIT(A) erred in holding that the amount of Rs 9,47,56,685 received by the Assessee on account ... nature of royalty under section 9(1)(vi) of the Act respectively as well as under Article 12 of the India-Netherlands tax treaty; 3. The Ld' CIT(A) erred In holding that the amount of Rs 1,83,37,856 received towards human resources related costs incurred

Renaissance Services Bv, Mumbai vs. ACIT (International Tax) 4(1) (1), Mumbai

1758/Mum/2021 2013-14

ITA 1453/MUM/2021[2015-16]Status: DisposedITAT Mumbai27 Jun 2022AY 2015-16
Section 143(3)Section 9(1)(vi)Section 9(1)(vii)

under section 9(1)(vii) of the Income-tax Act, 1961 (the Act) as well as under Article 12(5) of the India-Netherlands tax treaty; 2. The Ld' CIT(A) erred in holding that the amount of Rs 9,47,56,685 received by the Assessee on account ... nature of royalty under section 9(1)(vi) of the Act respectively as well as under Article 12 of the India-Netherlands tax treaty; 3. The Ld' CIT(A) erred In holding that the amount of Rs 1,83,37,856 received towards human resources related costs incurred

Shinhan Bank, Mumbai vs. DDIT (It) RG 2(1), Mumbai

In the result, the appeal is partly allowed in the terms indicated above

ITA 6994/MUM/2012[2008-09]Status: DisposedITAT Mumbai27 Jun 2022AY 2008-09
Section 143(3)Section 44C

that in view of Article 25(1) of the India Korea Double Taxation Avoidance Agreement [(1987) 165 ITR Stat 191; the then Indo Korea tax treaty, in short], which provides that ―nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation ... Indian companies. It was also pointed out that in terms of the provisions of Article 25(2) of the then India Korea tax treaty, ―the taxation on a permanent establishment which an enterprise of a contracting state has in the other contracting state, shall not be less favourably levied

Shinhan Bank, Mumbai vs. DDIT (It) RG 2(1), Mumbai

In the result, the appeal is partly allowed in the terms indicated above

ITA 6993/MUM/2012[2007-08]Status: DisposedITAT Mumbai27 Jun 2022AY 2007-08
Section 143(3)Section 90

that in view of Article 25(1) of the India Korea Double Taxation Avoidance Agreement [(1987) 165 ITR Stat 191; the then Indo Korea tax treaty, in short], which provides that “nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation ... Indian companies. It was also pointed out that in terms of the provisions of Article 25(2) of the then India Korea tax treaty, “the taxation on a permanent establishment which an enterprise of a contracting state has in the other contracting state, shall not be less CO Nos.: 113/Mum/2016

DCIT (It) -3(2) (2), Mumbai vs. M/S. Marriott Internation Servicesal Design & Construction, Mumbai

In the result the appeal filed by the Assessing Officer is thus dismissed

ITA 2289/MUM/2021[2016-17]Status: DisposedITAT Mumbai22 Jun 2022AY 2016-17
Section 143Section 195Section 9

received by the assessee is taxable in the hands of the assessee as fees of included services under article 12 of the US Tax Treaty and also as fees for technical services u/s. 9 (1) (vii) of the Income Tax Act. For the reasons set out in short while ... source liability u/s 195 of the Act, it was held that these amounts are not taxable under the provisions of the Indo-US tax treaty, while holding so the co-ordinate bench inter alia observed as follows:- 30.We have also gone through the definition of 'included services in Indo

DCIT (It) -3(2) (2), Mumbai vs. M/S. Marriott International Design & Construction Services, Mumbai

In the result the appeal filed by the Assessing Officer is thus dismissed

ITA 2288/MUM/2021[2015-16]Status: DisposedITAT Mumbai22 Jun 2022AY 2015-16
Section 143Section 195Section 9

received by the assessee is taxable in the hands of the assessee as fees of included services under article 12 of the US Tax Treaty and also as fees for technical services u/s. 9 (1) (vii) of the Income Tax Act. For the reasons set out in short while ... source liability u/s 195 of the Act, it was held that these amounts are not taxable under the provisions of the Indo-US tax treaty, while holding so the co-ordinate bench inter alia observed as follows:- 30.We have also gone through the definition of 'included services in Indo

DCIT (It) -3(2) (2), Mumbai vs. M/S. Marriott International Design & Construction Services, Mumbai

In the result the appeal filed by the Assessing Officer is thus dismissed

ITA 2286/MUM/2021[2013-14]Status: DisposedITAT Mumbai22 Jun 2022AY 2013-14
Section 143Section 195Section 9

received by the assessee is taxable in the hands of the assessee as fees of included services under article 12 of the US Tax Treaty and also as fees for technical services u/s. 9 (1) (vii) of the Income Tax Act. For the reasons set out in short while ... source liability u/s 195 of the Act, it was held that these amounts are not taxable under the provisions of the Indo-US tax treaty, while holding so the co-ordinate bench inter alia observed as follows:- 30.We have also gone through the definition of 'included services in Indo

DCIT (It) 3(2)(1), Mumbai vs. Marubeni Corporation, Mumbai

In the result, the cross objection appeal is allowed

ITA 11/MUM/2022[2017-18]Status: DisposedITAT Mumbai20 Jun 2022AY 2017-18
Section 143(3)

Article 11(2) of India Japan Double Taxation Avoidance Agreement [(1990) 182 ITR (Stat) 380- as amended from time to time; Indo Japanese tax treaty in short]. When this issue came up for consideration before the Assessing Officer, in the course of scrutiny assessment proceedings, he noted that the assessee ... Page 3 of 12 has a permanent establishment in India and that, in terms of the provisions of Article 11(6) of Indo-Japanese tax treaty, the provisions of Article 11(2), which provide for a lower rate of 10%, will not come into play. There is no dispute that