Law:

Section:

Section 90 of the Income-tax Act, 1961 (Corresponding to section 49A of the Indian Income-tax Act, 1922) - Double taxation relief - Where agreement exists - Assessment years 1952-53 to 1958-59 - Whether having regard to terms and conditions of Agreement for Avoidance of Double Taxation between Indian and Ceylon, it can be concluded that where tax payable on income arising or accruing from Ceylon under Indian Income-tax Act is in excess of tax payable in Ceylon, an abatement or refund of tax equal to amount of tax payable under Ceylon Income-tax Act is to be given to assessee - Held, yes FACTS For the relevant assessment years the assessee, a contractor, was assessed in the status of 'individual' and 'resident and ordinarily resident' on his income comprising of his total income accruing or arising in Ceylon. The Ceylon income was originally assessed on a provisional basis subject to revision on receipt of certificates of assessments from the Ceylon Income tax authorities. Later, on receipt of those certificates, the ITO noticed that the income determined by the Ceylon taxation authorities was more than the income which had been included in the Indian assessments when they were completed earlier. The ITO accordingly gave notice to the assessee for rectification and enhancement of the assessments. In reply to a notice, the assessee put forward a claim for relief under the terms of the Agreement for Avoidance of Double Taxation between India and Ceylon, The ITO finally determined the amount of abatement due to the assessee under the Agreement for Avoidance of Double Taxation between India and Ceylon (Ceylon Agreement) for all the years, rejecting certain contentions of the assessee relating to the manner in which the abatement should be determined under Art. III of the Ceylon Agreement. According to the assessee, the entire income accrued in Ceylon had to be omitted from the assessment made in India and that amount was liable to be included and taxed only in the Ceylon assessment order; or alternatively, the entire tax attributable to the Ceylon income included in the Indian assessment was to be deducted as an abatement from the tax payable under the assessment…

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