ABB AG v. Dy. CIT [IT(IT)A No. 1444/Bang/2019, dt. 24-11-2020] : 2020 TaxPub(DT) 5000 (Bang-Trib)

Point of accrual of Income of a non-resident as per DTAA

Facts:

Assessee a German entity was taxed for Fee for technical services which was provided by its AE in India and reported in the TP information. It was the case of the assessee that as per DTAA provisions only income which is received can be taxed and not what is provided by its AE. Revenue's plea was the taxability was on receipt or on due basis. On higher appeal --

Held in favour of the assessee that no income under the DTAA can be taxed on due basis. The DTAA uses the word "received" to confirm this.

Since the assessee confirmed that the said provision was offered to tax in the next year it was remanded for verification to that limited extent as to whether the transaction was revenue neutral.

Applied:

DCIT v. UHDE GMBH (1996) 54 TTJ 355 (Mum-Trib) : 1996 TaxPub(DT) 0112 (Mum-Trib)

DIT (International Taxation) v. M/s. Siemens Aktiengesellschaft (Income Tax Appeal No. 124 of 2010, dated 22-10-2012) (Bom.)

Johnson & Johnson v. ADIT (International Taxation) (2013) 32 taxmann.com 102 (Mum-Trib)

Dissented:

CIT v. Standard Triumph Co. Ltd. (1979) 119 ITR 573 (Mad) : 1979 TaxPub(DT) 0536 (Mad-HC)