Sec. 9(1)(vi) & 90 & 195 of Income-tax Act, 1961— Income - Income deemed to accrue or arise in India - Since the provisions of DTAA overrides the provisions of IT Act and are more beneficial , the assessee was not liable to deduct tax for payments made.

Facts: The issue in the appeal is against liability of assessee to deduct or withhold the tax in respect of payments made to its AE concerns or foreign companies, while remitting certain payments for the services availed from them. The assessee admittedly had not deducted tax out of such payments and the authorities below were of the view that assessee as such had defaulted both under the provisions of IT Act and DTAA with respective countries and hence, was liable to the demand raised under s. 201(1) and interest charged under s. 201(1A).

Held, that since the provisions of DTAA overrides the provisions of IT Act and are more beneficial and the definition of ‘royalty’ having not undergone any amendment in DTAA, the assessee was not liable to deduct tax for payments made. In such scenario, the assessee cannot be held to be in default and the demand created under s. 201(1) and interest charged under s. 201(1A) of the Act is thus, cancelled. - DEPUTY DIT V/s TETRA PAK INDIA (P) LTD. - [2020] 205 TTJ 703 (ITAT-PUNE)