Principal Commissioner Of Income Tax vs Daechang Seat Co
2024 Latest Caselaw 17568 Mad

Madras High Court

Principal Commissioner Of Income Tax vs Daechang Seat Co on 4 September, 2024

Bench: R.Suresh Kumar, C.Saravanan

                                                                                        T.C.A.No.160 of 2024

                                       IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                        DATED: 04.09.2024

                                                              CORAM

                                         THE HON'BLE MR.JUSTICE R.SURESH KUMAR
                                                          AND
                                          THE HON'BLE MR.JUSTICE C.SARAVANAN

                                                Tax Case Appeal No.160 of 2024

                     Principal Commissioner of Income Tax
                     International Taxation, Chennai.                          ...   Appellant

                                                                Vs.

                     Daechang Seat Co., Ltd
                     C/o M/s.Daechang India Seat Co., Pvt Ltd
                     No.491, Mannur Village, Sriperumbudur
                     Village, Kanchipuram -105.                                ...   Respondent
                                                          -----
                                  Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
                     against the order of the Income Tax Appellate Tribunal, Chennai dated
                     05.07.2023 in I.T(TP) A.No.101/CHNY/2018.


                                        For Appellant      : Mr.Karthik Ranganathan
                                                                ----
                                                         JUDGMENT

(Delivered by C.SARAVANAN,J.)

The appellant is before this Court challenging the impugned order dated

05.07.2023 passed by the Income Tax Appellate Tribunal in I.T(TP)

A.No.101/CHNY/2018. By the impugned order, the appellate Tribunal has

allowed the appeal filed by the respondent assessee. The issue raised in the

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appeal of the assessee was as regards to the order of the Assessing Officer

passed on the directions of the Dispute Resolution Panel concluding that the

guarantee fee received by the assessee to the extent of Rs.4,22,88,362/- is liable

to tax in India.

2. The dispute arose on account of the interpretation of Clause 23 of the

Double Taxation Avoidance Agreement (DTAA) between India and Replublic of

Korea. The said clause reads as under:

" Items of income of a resident of a Contracting State, wherever arising,

not dealt with in the foregoing Articles of this Convention, shall be taxable

only in that State."

3. The Tribunal has answered the issue as follows:

"17. In view of the above and following Article 23 of Indo-Korea DTAA

which specifically provides that taxability of 'other income' is only in the

contracting State and in the present case, the contracting State is Korea

and not India, hence taxability under the Income Tax Act is not at all

desirable. Hence, we delete the addition and allow this appeal of

assessee on this very issue. The appeal of the assessee is allowed.

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4. We find no error in the reasoning adopted by the Tribunal. As such, no

substantial question of law arises for consideration in this appeal. The appeal is

liable to be dismissed and it is accordingly dismissed. No costs.

                                                                         (R.S.K.,J.)    (C.S.N.,J.)
                                                                               04.09.2024
                     NCS : Yes/No
                     Index : Yes/No
                     KST




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                                  R. SURESH KUMAR, J.
                                                AND
                                      C.SARAVANAN, J.

                                                      KST









                                            04.09.2024



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