Case Law Details
CIT (IT) Vs Reliance Infocomm Ltd (Bombay High Court)
Mere amendments in the Act would not override the provisions of Double Tax Avoidance Agreement (DTAA). It was held that: on a final note, India’s change in position to the OECD Commentary cannot be a fact that influences the interpretation of the words defining royalty as they stand today. The only manner in which such change in position can be relevant is if such change is incorporated into the agreement itself and not otherwise. A change in nature of amendments noted held and observed as under: executive position cannot bring about a legislative into treaty concluded between two sovereign states. It is fallacious to assume that any change made to domestic law to rectify a situation of mistaken interpretation can spontaneously further their case in an international treaty. Therefore, mere amendment to Section 9(1)(vi) cannot result in a change. It is imperative that such amendment is brought about in the agreement as well. Any attempt short of this, even if it is evidence of the State’s discomfort at letting data broadcast revenue slip by, will be insufficient to persuade this Court to hold that such amendments are applicable to the DTAAs. In the said decision, Delhi High Court had also referred and relied upon the decision of this Court in the case of CIT v/s. Siemens Aktiongesellschaft reported in 310 ITR 320, in which it was held that, mere amendment of the Act, would not override the provisions of DTAA treaties” .
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
The Revenue is in Appeal against the Judgement of the Income Tax Appellate Tribunal (in short the Tribunal” ), raising the following questions for our consideration:
“ (a) Whether on facts and circumstances of the case and in law, the Tribunal erred in holding that the amount payable by payee was not taxable as royalty in the hands of the payee, under the DTAA between India and Netherlands and hence not liable for tax withholding u/s. 195?
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