- (1.) THESE are applications of the Revenue under S. 256(2) of the IT Act, 1961 ("Act"). The facts and circumstances and the proposed question are identical in all these applications. In fact, the Tribunal has disposed of all the applications under S. 256(1) by a common order. We have, therefore, taken up these applications for hearing together. The question of law proposed to be referred to this Court for opinion is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that as per art. XIV of the Agreement for Avoidance of Double Taxation (DTAA) between India and France, the assessee was not liable to be taxed in respect of salary paid in France for the assessee's stay in France without appreciating the fact that the contract for services between the assessee and M/s Spie Capag is for the services rendered in India and payment is for services rendered in India which is the contracting State for the assessee?"
(2.) WE have heard Mr. R.V. Desai, learned counsel for the petitioners. We have also heard Mr. D.K. Vyas, learned counsel for the respondents. Mr. Vyas submitted that the proposed question is wrongly framed as it gives an impression that the services were rendered in India, whereas, there is a categorical findings of the Tribunal to the effect that the services were rendered in France. Our attention was drawn by Mr. Vyas to art. XIV(1) of the DTAA between India and France which reads as under : "Art. XIV(1). Subject to the provisions of art. XII of salaries, wages or other similar remuneration for services as an employee performed in one of the contracting states by an individual who is a resident of the other contracting state may be taken only in the contracting state in which such services are rendered." Reference was also made by the learned counsel to sub s. (2) of S. 90 of the IT Act which provides that where the Central Government has entered into an agreement with the Government of any country outside India under sub s. (1) for granting relief of tax, or as the case may be, avoidance of taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to the assessee. It is submitted by Mr. Vyas that the proposed question does not arise out of the order of the Tribunal. Otherwise also, it is contended that from the findings of the Tribunal the answer to the question is self evident. We have carefully considered the rival submissions and perused the order of the Tribunal. There is a clear finding of the Tribunal that the services were rendered in France. The Tribunal has categorically observed that it was never the case of the Revenue that the payments in question were for the services rendered in India. That being so, under art. XIV(1) of the DTAA between India and France, the remuneration received by the employees for the services rendered in France cannot be subject to tax in India.
(3.) IN view of art. XIV(1) of the DTAA, sub s. (2) of S. 90 of the Act and the categorical finding of the Tribunal that the remuneration in question was for the services rendered in France, we are of the clear opinion that the proposed question is not a referable question of law.;