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Tax Publishers DIT v. Autodesk Asia (P) Ltd. [ITA No. 133 of 2013, dt. 15-9-2020] : 2020 TaxPub(DT) 4117 (Karn-HC) Amendment in Indo Singapore DTAA clause in between the year whereby the old clause with rate for royalty @ 15% was replaced by a new clause with royalty @ 10%. Which rate to apply? *Facts:* Assessee was held to be liable to royalty under Indo-Singapore DTAA. The DTAA was amended in between the year on 18-7-2005 whereby the new royalty clause replacing the erstwhile clause reducing the tax rate from 15% to 10%. It was the plea of the revenue that the rate of 15% should apply and the ITAT held that the amended rate of 10% will apply for the whole year. Aggrieved revenue went in higher appeal to High court. Held against the revenue that the amended rate of 10% will apply for the whole year. The clause was a replacing clause when this is done in the amendment on the DTAA then the existing clause is made to read as if it did not exist in the DTAA at all.

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DIT v. Autodesk Asia (P) Ltd. [ITA No. 133 of 2013, dt. 15-9-2020] : 2020 TaxPub(DT) 4117 (Karn-HC)

Amendment in Indo Singapore DTAA clause in between the year whereby the old clause with rate for royalty @ 15% was replaced by a new clause with royalty @ 10%. Which rate to apply?

Facts:

Assessee was held to be liable to royalty under Indo-Singapore DTAA. The DTAA was amended in between the year on 18-7-2005 whereby the new royalty clause replacing the erstwhile clause reducing the tax rate from 15% to 10%. It was the plea of the revenue that the rate of 15% should apply and the ITAT held that the amended rate of 10% will apply for the whole year. Aggrieved revenue went in higher appeal to High court.

Held against the revenue that the amended rate of 10% will apply for the whole year. The clause was a replacing clause when this is done in the amendment on the DTAA then the existing clause is made to read as if it did not exist in the DTAA at all.