Pizza Hut International LLC v. Dy. Director of IT 2(1)

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The Tax Publishers2013 TaxPub(DT) 0119 (Del-Trib) : (2012) 054 SOT 0425 INCOME TAX ACT, 1961 --Tax deduction at source--TDS amount. It is income received--Assessee, a the resident of USA, erred royalty income from Indian concern under technical licence agreement and claimed royalty was taxed at the rate of 15 per cent under DTAA. Assessing officer observed that assessee had claimed exemption under section 10(6A) therefore, income was taxable at the rate of 20 per cent. Assessee sated that section 90(2) grant option to non-resident companies to opt for beneficial tax treatment and, therefore, under corresponding DTAA royalty income was taxable at 15 per cent of gross amount, however, gross amount was not defined. Held: ,/i>Matter was remitted to assessing officer to decide the same and concluded that gross amount means amount received alongwith tax deducted at source. Also section 198 provides all sums deducted in accordance with provisions of Chapter XVII shall be deemed to be income received for computing income of assessee. Income Tax Act, 1961 Section 9 Income Tax Act, 1961 Section 10(6A) Income Tax Act, 1961 Section 198 INCOME TAX ACT, 1961 --Income--Deemed to accrue or arise in India Royalty taxable on cash basis or mercantile basis--Assessee-tax resident of USA earned royalty income from Indian concern under technical licence agreement and claimed it follows cash system of accounting and therefore, cannot be taxed unless income is actually received. Assessing officer observed that payment of royalty was provided in books of account but was not paid to the assessee in absence of any agreement approved by the RBI. Held: Claim of the assessee was right as royalty was taxable on cash basis and, therefore, there will be no liability to pay interest under section 234B and 234C nor any liability to pay advance tax. Income Tax Act, 1961 Section 9 Income Tax Act, 1961 Section 145 Income Tax Act, 1961 Section 5 In the ITAT, Delhi F Bench R. P. Tolani, J.M. & K. G. Bansal, A.M. Pizza Hut International LLC v. Dy. DIT IT Appeal Nos. 1600, 1601 & 1656 (Delhi) of 2011 A.Ys. 2003-04 & 2004-05 SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0119 (Del-Trib) : (2012) 054 SOT 0425

INCOME TAX ACT, 1961

--Tax deduction at source--TDS amount. It is income received--Assessee, a the resident of USA, erred royalty income from Indian concern under technical licence agreement and claimed royalty was taxed at the rate of 15 per cent under DTAA. Assessing officer observed that assessee had claimed exemption under section 10(6A) therefore, income was taxable at the rate of 20 per cent. Assessee sated that section 90(2) grant option to non-resident companies to opt for beneficial tax treatment and, therefore, under corresponding DTAA royalty income was taxable at 15 per cent of gross amount, however, gross amount was not defined. Held: ,/i>Matter was remitted to assessing officer to decide the same and concluded that gross amount means amount received alongwith tax deducted at source. Also section 198 provides all sums deducted in accordance with provisions of Chapter XVII shall be deemed to be income received for computing income of assessee.

Income Tax Act, 1961 Section 9

Income Tax Act, 1961 Section 10(6A)

Income Tax Act, 1961 Section 198

INCOME TAX ACT, 1961

--Income--Deemed to accrue or arise in India Royalty taxable on cash basis or mercantile basis--Assessee-tax resident of USA earned royalty income from Indian concern under technical licence agreement and claimed it follows cash system of accounting and therefore, cannot be taxed unless income is actually received. Assessing officer observed that payment of royalty was provided in books of account but was not paid to the assessee in absence of any agreement approved by the RBI. Held: Claim of the assessee was right as royalty was taxable on cash basis and, therefore, there will be no liability to pay interest under section 234B and 234C nor any liability to pay advance tax.

Income Tax Act, 1961 Section 9

Income Tax Act, 1961 Section 145

Income Tax Act, 1961 Section 5

In the ITAT, Delhi F Bench

R. P. Tolani, J.M. & K. G. Bansal, A.M.

Pizza Hut International LLC v. Dy. DIT

IT Appeal Nos. 1600, 1601 & 1656 (Delhi) of 2011

A.Ys. 2003-04 & 2004-05