INCOME TAX ACT, 1961

Section 220(6)

Recovery - Stay of demand - Assessee having a prima-facie case in its favour -

Revenue took the view that receipt for granting 'live' rights by assessee-foreign company would be taxable as royalty. It was alleged that because of amendment and insertion of Explanation 6 to section 9(1)(vi), the said receipt was taxable in the hands of the assessee as royalty. However, the assessee submitted that as no amendment had been made to the Tax Treaty Provisions, then the provisions of the Tax Treaty would prevail over the amended Income tax Act. Accordingly, the assessee filed stay application against recovery of outstanding demand. Held: The case of the assessee was that as no amendment had been made to the Tax Treaty Provisions, then the provisions of the Tax Treaty would prevail over the amended Income tax Act. In such facts and circumstances, the assessee had a prima-facie case in its favour. Further, insofar as granting of stay against recovery of outstanding demand was concerned, it was subject to the condition that part of the demand would be paid by the assessee to which it agreed. Hence, the recovery of outstanding demand against the assessee was stayed.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2015-16

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