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Facts of the CaseThe respondents were brothers and joint owners of property bearing No. 112, Golf Links, New Delhi. The property was sold to Shri Sunil Charla and Smt. Surksha Charla.A search under Section 132(1) was ...

Comprehensive Analysis of Delhi High Court Ruling: Upholding the Validity of Reopening Assessment Proceedings under Section 147 and 148 of the Income Tax Act in Video Electronics Ltd. vs. Joint CIT

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 42

Facts of the Case The assessee, a limited company engaged in the manufacturing of TVs and the leasing of computers, claimed substantial depreciation on computers during the assessment year 1990-1991. ...

Commissioner of Income Tax vs Indair Carriers Pvt. Ltd. – Delhi High Court Upholds ITAT Remand in Block Assessment Proceedings under Sections 132, 158BC & 158BFA of the Income Tax Act

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 31

Facts of the CaseA search and seizure operation under Section 132 of the Income Tax Act was conducted on 17.01.2002 at the business premises of Indair Carriers Pvt. Ltd. and at the residences of its directors, shareho...

Commissioner of Income Tax vs. M/s. [Assessees]: Judicial Determination on the Genuineness of Purchases and Validity of Additions in Block Assessment Proceedings under Section 158BC

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 32

Facts of the CaseFollowing a search and seizure operation conducted at the premises of the respondent, M/s. [Assessee Name], on 21.07.2004, the Revenue initiated proceedings to account for undisclosed income. A statuto...

Comprehensive Legal Analysis: Delhi High Court Ruling on the Validity of Reopening Income Tax Assessments under Section 147/148 for Sham Lease-Back Transactions in the Case of Video Electronics Ltd. vs. Joint CIT

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 36

Facts of the CaseThe assessee, a manufacturer of televisions, engaged in a "lease-back" transaction involving computers. The company purchased computers from M/s Pertech Computers Limited (PCL) and immediately leased t...

Commissioner of Income Tax-V v. Pepsico India Holding Pvt. Ltd. (2011) – Delhi High Court on Section 35D Amortization, Excess Sugar Consumption Addition, Depreciation & MODVAT Credit

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 25

Facts of the Case The assessee, Pepsico India Holding Pvt. Ltd., claimed deduction of ₹8,02,000 being one-tenth of preliminary expenses amortized under Section 35D of the Income-tax Act. The Assessing O...

Ashok Malhotra vs Commissioner of Income Tax & ANR – Special Audit under Section 142(2A), Income Tax Act, 1961 | W.P.(C) 1750/2011, Delhi High Court

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 24

Facts Case The petitioner, Ashok Malhotra, challenged the order dated 29.12.2010, whereby the Deputy Commissioner of Income Tax, Central Circle-3, New Delhi, directed a special audit to be conducted u...

Ashok Malhotra vs Commissioner of Income Tax & ANR – Special Audit under Section 142(2A), Income Tax Act, 1961 | W.P.(C) 1750/2011, Delhi High Court

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 23

Commissioner of Income Tax, Central-II, New Delhi vs D.C.M. Limited | Taxability of Technical Know-How Remittances under DTAA & Section 9(1)(vi) of Income Tax Act, 1961 Facts of the Case • The assessee, D.C.M. Limited, engaged in sugar manufacturing, entered into a Technical Collaboration Agreement (12.10.1983) with Tate & Lyle Process Technology, London, for acquiring the “TALO processes.” • Total consideration: £155,000 in four instalments for transfer of technical know-how, designs, and supply of equipment. • Initial payments required deduction of tax at source (TDS) at 20% per IAC certificates. • Assessee argued that payments were business profits, not royalties, under Article XIII(3) of the India-UK Double Taxation Avoidance Agreement (DTAA), as Tate had no permanent establishment in India. Issues Involved 1. Whether payments made by D.C.M. to Tate & Lyle constituted “royalty” under Article XIII(3) of the DTAA. 2. Whether TDS under Section 9(1)(vi) of the Income Tax Act, 1961 was applicable. 3. Interpretation of the scope of royalty under DTAA versus Section 9(1)(vi). Petitioner’s Arguments (Income Tax Department) • Claimed that assessee only had use of technology, not a transfer of know-how. • Payments made should be treated as royalties under DTAA. • Reliance on precedent cases: N.V. Philips vs CIT (1988) 172 ITR 521; Alembic Chemical Works Co. Ltd vs CIT (1989) 177 ITR 377; Shriram Pistons and Rings Ltd vs CIT (2008) 307 ITR 363; CIT vs J.K. Synthetics Ltd (2009) 309 ITR 371. Respondent’s Arguments (D.C.M. Limited) • Payments were for complete transfer of technical know-how, designs, and operational guidance (“TALO processes”) — a conditional sale, not mere use. • Payments constituted business profits of Tate & Lyle, not royalties. • Reliance on Tribunal judgment and CIT vs Davy Ashmore India Ltd. (1991) 190 ITR 626. • Highlighted that DTAA definitions of royalty were narrower than Section 9(1)(vi) of IT Act. Court Findings / Order • Tribunal’s interpretation accepted: o Consideration paid for transfer of designs, drawings, and know-how does not constitute royalty under DTAA. o DTAA provisions override Section 9(1)(vi) of the IT Act. o Payments are business profits of Tate & Lyle, not taxable in India, as there was no permanent establishment. • Revenue’s reliance on broad interpretation of “payments of any kind” rejected. • Court dismissed references from the Department; parties bear their own costs. Important Clarifications • Distinction drawn between “use of technology” and “transfer of know-how/technology.” • DTAA definition of royalty is narrower than Section 9(1)(vi) — lump-sum transfers are not automatically royalties. • Conditional right to sub-license does not reduce the transaction to mere usage. • Payments to foreign enterprise without a permanent establishment in India cannot be taxed as business profits. Sections Involved • Section 9(1)(vi), Income Tax Act, 1961 – Definition and taxation of royalty. • Article XIII(3), India-UK DTAA – Definition of royalty and business profits. Blog Keywords (SEO-Optimized) #D.C.M.Limited, #CommissionerOfIncomeTax, #DTAA, #Section9, #TechnicalKnowHow, #Taxability, #IncomeTaxAct1961, #RoyaltyDefinition, #TDS, #HighCourtDelhi, #IndiaUKTaxAgreement, #BusinessProfits, #TALOProcess, #TechnicalCollaborationAgreement Blog Description (Meta Description) Explore the landmark Delhi High Court case Commissioner of Income Tax vs D.C.M. Limited (2011), clarifying the taxability of technical know-how payments under Section 9(1)(vi) of the Income Tax Act, 1961 and Article XIII(3) of the India-UK DTAA. Understand distinctions between royalties and business profits, Tribunal interpretation, and key precedents including N.V. Philips, Alembic Chemical Works, and Davy Ashmore India Ltd. Link to download the order – https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:1482-DB/RAS10032011ITR871992.pdf Disclaimer This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 43

Facts of the Case The assessee, D.C.M. Limited, engaged in sugar manufacturing, entered into a Technical Collaboration Agreement (12.10.1983) with Tate & Lyle Process Technology, London, for acquiring ...

Commissioner of Income Tax, Central-II, New Delhi vs. D.C.M. Limited – Interpretation of ‘Royalty’ under Section 9(1)(vi) of the Income Tax Act, 1961 vs. Article XIII of India–UK DTAA in Technical Know-How Transfer Agreements

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08/06/2026 | 0 COMMENTS | VISITOR'S COUNT: 41

Facts of the Case: The assessee, D.C.M. Limited, engaged in sugar manufacturing, entered into a Technical Collaboration Agreement dated 12.10.1983 with Tate & Lyle Process Technology, London, for the transfe...

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