INCOME TAX ACT, 1961

Section 90

Double taxation relief - Agreement between India and UK - Remuneration for legal services treated as fees for technical services under section 9(1)(vii) - No taxability under DTAA

Assessee-firm, based at UK, received income towards providing legal services. AO held that receipts of assessee were in the nature of 'fees for Technical Services. Assessee pleaded that receipts were not chargeable to tax in India, as assessee was protected by India-UK DTAA. AO denied benefit to assessee under India-UK DTAA Treaty on the ground that income of assessee was not taxable in UK, hence, it could not be treated as a resident of UK under Article 4(1) India-UK DTAA and income received by the assessee was taxable as FTS under section 9(1)(vii). Held: Remuneration received by assessee for providing legal services did not fall within the ambit of 'Fees for Technical Services' as defined in article 13 of Indo-UK DTAA and since amount received was not taxable under DTAA as FTS, it could not be brought to tax as FTS by applying the provisions of section 9(1)(vii) since assessee was entitled to claim benefit of India-UK DTAA.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 90 Article 5(2)(k)(i)

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