TDS credit can be claimed from the Country in which the related Income was Taxed: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising of Shri Shamim Yahya, accountant member and Shri C M Garg, Judicial member has held that TDS credit can be claimed from the country in which the related income was taxed.

The appellant, M/s Turner Broadcasting System Asia Pacific Inc, is a company incorporated under the laws of the United States of America (‘USA’) and is a tax resident of the USA and derived revenue from the grant of exclusive rights to Turner International India Private Limited (TIIPL’) in India to sell advertising on the products and to distribute the products. The AO/TPO have proposed certain adjustments in the income and the assessee approached the Dispute Resolution Panel (DRP) raising objections to the adjustments proposed in the draft assessment order.

It was observed that the initiating reassessment proceedings under Section 148 of the Act for the reason those reassessment proceedings were barred by limitation given in the proviso to Section 147 of the Act as there was no failure on the Assessee’s part to disclose fully and truly all material facts necessary for its assessment.

The appellant contended that the AO erred the amount derived by the Appellant on account of distribution revenue from Turner International India Private Limited as royalty under Section 9(i)(vi) of the Act and also as per the provisions of India-USA Double Taxation Avoidance Agreement and erred in levying interest under Section 234B of the Act. 

The Tribunal observed that the income does not form part of the total income of the assessee the credit of TDS was denied correctly and held that the assessee can claim the credit of TDS in the country in which the related income is offered to tax.  The Tribunal directed to consider the claim of credit as TDS and the appeal of the assessee was allowed for statistical purposes. The appellant was represented by Shri Ravi Sharma & Shri Rishabh Malhotra and the respondent was represented by Ms Meenakshi Singh.

To Read the full text of the Order CLICK HERE

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