Law:

Section:

Section 15 of the Income-tax Act, 1961, read with articles 18(3) and 18(5) of the Double Taxation Avoidance Agreement between India and Malaysia - Salaries - Chargeable as - Whether in view of articles 18(3) and 18(5), pension received by assessee from University of Malaysia had to be construed as pension received from 'Government, which was taxable in terms of article 18(3) in Malaysia by Government of Malaysia, and thus could not be assessed as salary under the Act - Held, yes FACTS The revenue contended that the pension received by the assessee from the University of Malaysia was assessable as salary under the Act. But the Tribunal did not agree. On reference : HELD The Tribunal in its order relying on articles 18(3) and 18(5) of the Agreement for Avoidance of Double Taxation of income entered into between the Government of India and Government of Malaysia, had held that the pension received was not taxable in India, since it was liable for tax in Malaysia, which was the contracting State. There would be no question of imposing the tax in India, which would amount to double taxation. The Tribunal had pointed out that the University of Malaysia is a statutory authority and as such, would fall within the term 'Government' and, therefore, the pension paid by the University of Malaysia, as in the present case, would have to be construed for the purpose of the agreement as a pension received from the Government which was taxable in terms of article 18(3) in Malaysia by Government of Malaysia. Nothing wrong was found in the order and it was absolutely correct. The same was to be confirmed. T.C.A. Ramanujam for the Applicant. JUDGMENT V.S. Sirpurkar, J. - The…

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