Director Of Income-Tax (International Taxation v. M/S.siemens Aktiengesellschaft

agk IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.124 OF 2010 Director of Income-tax (International Taxation)..Appellant. Versus M/s.Siemens Aktiengesellschaft ..Respondent. Mr.Suresh Kumar for the appellant.Mr.Percy J Pardiwala, Senior Advocate with Mr.Sameer Chitnis i/by Crawford Bayley & Companyt for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 22[nd] October 2012 P.C. : 1.This appeal is filed by the Revenue raising following questions of law. i)Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the Royalty and fees for technical services should be taxed on receipt basis without appreciating the fact that the Hon'ble Supreme Court has held in the case of Standard Drum Motors Private Limited V/s. CIT 201 ITR 391 that the credit entry to the account of the assessee non-resident in the books of the Indian company amounted to receipt by the non-resident ?was right in law in holding that the Royalty and fees for technical services should be taxed on receipt basis without appreciating the fact that the Hon'ble Supreme Court has held in the case of Standard Drum Motors Private Limited V/s. CIT 201 ITR 391 that the credit entry to the account of the assessee non-resident in the books of the Indian company amounted to receipt by the non-resident ? ii)Whether on the facts and I the circumstances of the case the Tribunal was right in law in confirming the order of the CIT (A) in deciding that as the assessee is a non-resident, its entire income is tax deductible, the question of levy of interest under Section 234B will not arise ?was right in law in confirming the order of the CIT (A) in deciding that as the assessee is a non-resident, its entire income is tax deductible, the question of levy of interest under Section 234B will not arise ? 2.As regards first question is concerned, the Income Tax Appellate Tribunal referring to para-1 to 3 under Article IIX-A of the Double Taxation Avoidance Treaty with the Federal Germany Republic as per Notification dated 26[th] August 1985 held that the assessment of royalty or any fees for technical services should be made in the year in which the amounts are received and not otherwise. Counsel for the Revenue relied upon the Special Bench decision of the Tribunal in the assessee's own case, which in our opinion, has no relevance to the facts of the present case, as it relates to the period prior to the issuance of Notification dated 26[th] August 1985. In this view of the matter the decision of the Income Tax Appellate Tribunal in holding that the royalty and fees for technical services should be taxed on receipt basis cannot be faulted. 3.As regards second question is concerned, counsel for the parties state that the said question is covered against the Revenue by the judgment of this Court in the case of Director of Income Tax (International Taxation) V/s. NGC Network Asia LLC Limited reported in (2009) 313 ITR 187 (Bom.). Accordingly, the second question cannot be entertained. 4.The appeal is disposed off in above terms with no order as to costs. (M.S. Sanklecha, J.)(J.P. Devadhar, J.)