Interest on income tax refund taxable under Article 11(2) of India- Malaysia DTAA

Aker Solutions India SDN BHD Vs DCIT (International Taxation) (ITAT Mumbai) The assessee in appeal has assailed the order of CIT(A) in upholding the assessment order taxing the interest on income tax refund as business income under Article-7 of the India- Malaysia Double Taxation Avoidance Agreement (DTAA) @40% + surcharge @ 5% + cess @ 3%. We find that issue of taxability of interest on income tax refund was considered by the Special Bench in the case of Clough Engineering Ltd. (supra). The Special Bench held that interest on income tax refund would be taxable under Article-11 and not as busi...