Case Law Details
ABB Switzerland Ltd Vs DCIT (ITAT Bangalore)
ITAT Bangalore held that in case of non-resident, income arising in India by way of royalties or technical charges could be taxed in India but that could be only on the receipt basis under India-Switzerland DTAA and not on accrual basis.
Facts- The assessee is a company incorporated and operating in Switzerland. The case was selected for scrutiny with a reason ‘International Transaction(s) in respect of intangible property and Large International transaction(s) Statutory notices were served on the assessee.
During the assessment proceedings, the AO observed from the Form 3CEB that the assessee had received Rs.185,69,65,563/- as royalty from M/s. ABB India Ltd. but in the return of income the assessee had offered only Rs.184,07,46,730/-. A show cause notice was issued to the assessee on the difference of Rs. 1,62,18,833/- in respect of royalty income.
AO noted that the assessee failed to substantiate the difference of royalty income was offered by it in the subsequent year or the reconciliation of the difference of Rs.1,62,18,833. Accordingly the AO made addition of the amount as royalty income for the year under consideration.
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