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2001 Supreme(Mad) 1604
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE R. JAYASIMHA BABU & THE HONOURABLE MR. JUSTICE A.K. RAJAN
Commissioner of Income Tax - Appellant
Versus
K. Muthu - Respondents
Tax Case No. 285 of 2000
Decided On : 10 December 2001
Income derived from Malaysia cannot be clubbed for the purpose of taxation in India as per the agreement for avoidance of double taxation.
Headnote:
Double Taxation - Income from Malaysia - Taxation Agreement
Fact of the Case:
The issue was whether the income from Malaysia can be subjected to tax in India as per the agreement for avoidance of double taxation.
Finding of the Court:
The Court held in favor of the assessee, citing previous cases and the agreement for avoidance of double taxation.
Issues: Interpretation of the taxation agreement between India and Malaysia, and the taxability of income from Malaysia in India.
Ratio Decidendi: The income derived from Malaysia cannot be clubbed for the purpose of taxation in India as per the agreement for avoidance of double taxation.
Final Decision: The question was answered against the revenue and in favor of the assessee.
A.K. RAJAN, J.
The question that is referred is,
"Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the income from Malaysia cannot be subjected to tax in accordance with the agreement for avoidance of double taxation of income and prevention of fiscalevasion of tax, entered into between Government of India and the Government of Malaysia?"
2. In a number of cases this Court has held this issue against the revenue and in favour of the assessee. One such instance is the case reported in CIT v. VR.S.RM Firm wherein this Court has held that the income derived from Malaysia cannot be clubbed for the purpose of taxation in India. Hence, this question is answered against the revenue and in favour of the assessee.
