AMARCHAND & MANGALDAS & SURESH A SHROFF & CO., Mumbai V. DCIT 9(1)(2), Mumbai

ITA 2613/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1111 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 26-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Residential status; Permanent establishment
• Section: 143(3)

Judgement Text

ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI ' I ' BENCH, MUMBAI [CORAM: PRAMOD KUMAR (VICE PRESIDENT) , AND PAVAN KUMAR GADALE (JUDICIAL MEMBER)] ITA NO. 2613/MUM/ 19 ASSESSMENT YEAR: 20 14 - 15 AMARCHAND & MAN GALDAS & SURESH A SHR OFF & CO . APP ELLANT 3 RD FLOOR, LENTIN CHAMBERS , DALAL STREET, FOR T, MUM BAI 400023 [PAN: AAAFA6542P] VS . ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 16(2), MUMBAI RESPONDENT APPEARANCES BY DR . S M LALA, DISHESH SHRIVASTA VA , AND HARSH BAFNA FOR THE AP PELLANT S S IYENGAR FOR THE RESPONDE NT DATE OF CONCLUDING THE HEARING: : DECEMBER 1 6 , 2020 DATE OF PRONOUNCEMENT : DECEMBER 18 , 2020 O R D E R PER PRAMOD KUMAR, VP: 1. BY WAY OF THIS AP PEAL, THE ASSESSEE APPELLANT HAS CHALLENGE D THE CORRECTNESS OF THE ORD ER DATED 7 TH MARCH 2019 PASSED BY T HE LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCO ME TAX A C T, 1961, FOR THE ASSESSMENT YEAR 2014 - 15. 2. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHE THER OR NOT THE AUTHORI TIES BELOW WERE JUSTIFIED IN DECLINING TAX C REDI T UNDER ARTICLE 23 (2) OF INDIA JAPAN DOUBLE TAXATION A VOIDANCE AGREEMENT [ ' INDO JAPANESE TAX TREATY ' , IN S HORT ; ( 1990 ) 182 ITR (STAT) 380 - AS AME NDED F R OM TIME TO TIME ] , IN RESPE CT OF TAXES OF RS 80,55,856 WITHHELD BY ITS CLIENTS FISCALLY DOMIC ILED IN JAPAN, ON THE FACTS AND IN THE CIRCUMSTANCES OF TH IS CASE. AS A N ALTERNATE PLEA, ASSESSEE PLEADS THAT , I N THE EVENT OF THE ASSESSEE BEING DECLINED THE TAX CREDIT IN RESPECT OF THE T AXES SO WITHHELD IN JAPAN, THE ASSESSEE S HOULD AT LEAST BE ALLOWED A DEDUCTION , FOR THE SAID AMOUNT, IN COMPUTATION OF ITS PRO FESSIONAL INCOME. 3. THE ISSUE IN APPEAL LIES IN A RA THER NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US IS ON E OF IN D IA ' S WELL - KNOWN LAW FIRMS AND IS ASSES SED TO TAX IN THE STATUS OF A PARTNERSHIP F IRM. THE RETURN FILED BY THE ASSESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT PROCEED INGS . IN THE COURS E OF THESE SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS, INT ER ALIA, ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 2 OF 9 NOTICED THA T THE ASSESSEE HAD CLAIMED A FOREIGN TAX C REDIT OF RS 80,55,856 IN RESPECT OF TAX ES WITHHEL D BY ITS CLIENTS IN JAPAN . TH E TAX ES SO WITHHELD WERE AT THE RATE OF 10% ON GR OSS BILLING AMOU NTS, BY TREATING THE PROF ESSIONAL FEES EARNED BY THE ASSESSEE IN JAPAN AS TAXABLE IN JAPAN, I.E. THE SOURCE COU N TRY, UNDER ARTICLE 12 OF INDO - JAPANESE TAX TREATY . THE ASSESSING OFFICER , HOWE VER, WAS OF THE VIEW THAT CREDIT FOR SUCH TAXES WITHHELD IN JAPAN WAS NOT ADMISSIBLE TO THE ASSESSEE, FOR THE REASON THAT THE INCOME SO EARNED BY THE ASSESSEE COULD ON LY HAVE B EEN TAXABLE UNDER ARTICLE 14 FOR THE ' INDEPENDENT P ERSONNEL SERVICES ' BUT THEN SINCE ASSESSEE ADMITTEDLY DID NOT HAVE A NY FIXED IN JAPAN, THE CON DITION PRECEDENT FOR TAXA BILITY EVEN UNDER ARTICLE 14 W AS NOT AT ALL SA T ISFIED. THE ASSESSING OFFICER WAS THUS OF THE VIEW THAT THE TAXES HAVE BEEN WRONGLY WITHHELD IN JAPAN, AND , THEREFORE, THE ASSE SSEE WAS NOT ENTITLED TO A FOREIGN TAX CREDIT IN RESPECT OF THE SAME. IN SUPPORT OF THE STAND SO TAKEN, THE LEARNED ASSESSING O FFICER PLACED HIS RELIANCE ON THE DECISIO NS OF THE COORDINATE BE NCHES IN THE CASES OF MAHARASHTRA STATE ELECTRI CITY BOARD VS DCIT [(2004) 90 ITD 793 ( MUM )] , DY. CIT V. CHADBOURNE & PARKE LLP [ (2005) 2 SOT 434 (MUM)] , AND ERSHISANYE CONSTRUCTION GROUP INDIA (P.) LTD. VS DCIT [(2017) 84 TAXMANN.COM 108 (KOL ) ] . THE FO REIGN TAX CREDIT OF RS 80,55,856 WAS THUS DECLINED. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LEARNED COMMISSIONER (APPEALS) , BUT WITHOUT ANY SUCCESS. LEARNED COMMISSIONER ( APPEALS) REFERRED TO CERTAIN EMAILS E X CHANGED BETW EEN THE ASSESSEE AND HIS JAP ANESE CLIENTS , WHICH SHOW THAT THE ASSESSEE HAD CON SISTENT LY TAKEN A STAND THAT THE ASSESSEE COULD ONLY BE TAXED UNDER ARTICLE 14 IN JAPAN, AND SINCE THE ASSESSEE ADMITTEDLY DID NOT HAVE A FIXED BASE IN JAPAN FOR MORE THAN 183 D AYS, WHICH IS SINE QUA NON FOR TAXATION UNDER THAT ARTICLE, NO TAXES CO ULD LEGITIMATELY BE WITHHELD FROM THE PAYMENTS IN QUESTION. LEAR NED C OMMISSIONER (APPE ALS) NOTED THAT THE TAXES WITHHELD BY THE JAPANES E C LIENTS WERE CONTRARY TO THE S CHE ME OF THE INDO JAPANESE TAX TREATY, AND, THEREFORE, THE ASSESSEE WAS NOT ENTIT LED TO ANY FOREIGN TAX CREDIT FOR THE SAME. THE ACTION OF THE ASSESSING OFFICER WAS THUS CONFIRMED, AND INFACT F URTHER FORTIFIED, BY THE LEARNE D C OMMISSIONER (APPEALS ) . THE ASSESSEE IS NOT SAT ISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD DR . LALA, L EA R NED COUNS EL FOR THE ASSESSEE, AND SHRI IYENGA R, LEA R NED DEPARTMENTAL REPRESENTATIV E , AT LENGTH. WE HAVE ALSO PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTS OF THE CASE IN TH E LIGHT OF THE APPLICABLE LEGAL POSITION. 5. THERE IS NO DISPUTE ABOUT THE FUNDAMENTA L L EGAL POSITION THAT , IN TERMS OF ARTICLE 23(2 )( A) OF INDO JAPANESE TAX TREATY, ' W HERE A RESIDENT OF INDIA DERI VES INCOME WHICH, IN ACCORDANCE WITH THE PROVISIONS OF THIS CO NVENTION, MAY BE TAXED IN JAPAN , INDIA SHALL ALLOW AS A DEDUCTION FROM THE TAX ON THE INCOME OF THAT RESIDENT AN AMOUNT EQUAL TO THE JAPANESE TAX PAID IN JAPAN, WHETHER DIRECTLY OR BY DEDUCTION ' [EMPHASIS, BY UNDERLINING, SUPPLIED BY US] . WHAT ESSENTIALLY F OLLOWS IS THAT WHEN IN ACCORDANCE WITH THE PROVISIONS OF INDO JA PANESE TAX TREAT Y, AN Y INCOME OF I NDIAN RESIDENT IS TAXED IN JAPAN, THE INDIAN RESIDENT WILL GET THE DED UCTION, IN THE COMPUTATIO N O F HIS TAX LIABILITY, TAXES PAID BY THE ASSESSEE IN JAPAN - W HETHER PAID DIRECTLY BY THE ASSESSEE OR WHETHER TAXES WERE WITHHELD IN JAPAN. THE RE ARE MANY OTHER CONDITIONS ATTACHED TO THIS BASIC PROVISION, BUT, FOR OU R PRESENT PURPOSES, TH OSE CONDITIONS AR E NOT REALLY RELEVANT. THAT BRING S US T O THE QUESTION AS TO WHAT ARE THE CONNO TATIONS OF ' I N AC CORDANCE WITH THE PROVISIONS ' OF THE TAX TRE ATY. IN THE CASE OF NAV BHARAT VANIJYA VS C IT [(1980 ) 123 ITR 865 (CAL) ] , HON ' BLE CALCUTTA H I GH COURT HAS OBSERVED TH AT ' (T) HE WORDS ' IN ACCORDANCE WITH ' , MEAN BEING IN AGREEMENT OR HAR MONY WITH; IN CONFORMITY TO: VIDE THE COMPACT EDITION OF THE OXFORD ENGLISH DICTIONARY, VOL. ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 3 OF 9 I , PAGE 62 ' . IN PARAGRAPH 32.5 OF THE OECD MODEL CO NVENTION C OMMENTARY , 2017, A S INDEED IN ITS EARLI ER VERSIONS, IT IS , INTER ALI A , STATED T HAT ' ARTICLE 23 A AND A RTICLE 23 B, HOWEVER, DO NOT REQUIRE THAT THE STATE OF RESIDENCE ELIMINATE DOUBLE TAXATION IN ' ALL ' CASES WHERE THE STATE OF SOURCE HAS IMPOSED ITS TAX BY APPLYING TO AN ITEM OF INCOME A P ROVISION OF THE CONVENTION THAT IS DIFFERENT FROM THAT WHICH THE STA TE OF RESIDENCE CONSIDERS TO BE APPLICABLE ' . ESSE NTI ALLY, THE REFORE , IT IS OPEN T O THE ASSESSING OFFICER TO TA KE A CALL ON WHETHER THE TAXES WITHHELD IN THE TREAT Y PARTNER JURISDICTION COULD BE REASONABLY SAID TO BE IN HARMONY WITH OR IN CONFORMITY WITH THE PROVISIONS OF THE RELATED TAX TREATY, AND IN A CASE IN WHICH HE COMES TO THE CONCLUSION THAT THE TAXES SO WITH HELD IN THE TREATY PARTNER JURISDICTION COULD INDEED BE REASONABL Y SAID T O BE NOT IN HARMONY WITH THE SCHEME OF TAXATION IN THAT TAX TREATY, HE CAN DECLINE THE FOREIGN TAX CREDIT UNDER ARTICLE 23(2)(A) . THE QUESTION , THEREFORE , THAT WE REALLY NEED TO ADJUDICAT E UPON IS W HETHER THE ASSESSEE COULD REASONABL Y BE SAID TO B E TAXABLE IN JAPAN UNDER ARTICLE 12 , IN RESPECT OF THE PROF ESSIONAL INCOME EA RNED IN JAPAN, OF THE IND O JAP ANESE TAX TREATY . IT IS WHEN THE ANSWER TO THIS QUESTION IS IN THE AFF IRMATIVE THAT THE GRANTING OF THE TAX CREDIT IN RESPECT OF TAXES SO PAID ABROAD COULD BE CONSIDERED, OF CO U RSE ON MERITS, IN THE HANDS OF THE ASSESSEE 6. LET US BEG IN BY TAKING A LOOK AT ARTICLE 12 A ND ARTICLE 1 4 OF THE INDO JAP ANESE TAX TREATY, AS THEY ARE RELE VANT FOR THE PURPOSES OF OUR ADJUDICATION ON THIS CORE QUESTION. THESE PROVISION S ARE REPRODUCED BELOW: ARTICLE 12 - ROYALTIES & F EES FOR TECHNICAL SERVICES 1. ROYALTIES AND FEES FOR TECHNICAL SE RVICES ARISING IN A CONTRACTING STATE AND PAID TO A RE SIDENT OF THE OTHER CONTRACTING S TATE MAY BE TAXED IN THAT OTHER CONTRACTING STATE. 2. HOWEVER, SUCH ROYALTIES AND FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY A RISE AND ACCORDING TO THE LAWS OF THAT CONTRACTING S TATE, BUT IF THE RECIPIENT IS THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR TECHNI CAL SERVICES, THE TAX SO CHARGED SHALL NOT EXCEED 10 PER CENT OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR TECHNIC AL SERVICES. 3. THE TERM 'ROYALTIES' AS USED IN TH IS ARTICLE MEANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF, OR TH E RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR SCIENTIFIC WORK INCLUDING CINEMATOGRAPH FILMS AND FILMS OR TAPE S FOR RADIO OR TELEVISION BROADCASTING, ANY PATENT, TRADE MARK, DESIGN OR MODEL, PLA N, SECRET FORMULA OR PROCESS, OR FOR THE USE OF, OR TH E RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL O R SCIENTIFIC EXPERIENCE. 4. THE TERM 'FEES FOR TEC HNICAL SERVICES' AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY AMOUNT TO ANY PERSON OTH ER THAN PAYMENTS TO AN EMPLOYEE OF A PERSON MAKING PAYMENTS AND TO ANY INDIVIDUAL FOR INDEPENDENT PERSONAL SERVICES RE FERRED TO IN ARTICLE 14, IN CONSIDERATION FOR THE S ERVICES OF A MANAGERIAL, TECHNICA L OR CONSULTANCY NATURE, INCLUDING THE PROVISIONS OF S ERVICES OF TECHNICAL OR OTHER PERSONNEL. ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 4 OF 9 5. THE PROVISIONS OF PARAGRAPHS 1 AND 2 SHALL NOT APPLY IF THE BENEFICIAL OW NER OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES , BEING A RESIDENT OF A CONTRACTI NG STATE, CARRIES ON BUSINESS IN THE OTHER CONTRACTING STATE IN WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARISE, THROUGH A PERMANENT ESTABLISHMENT SITUATED THEREIN , OR PERFORMS IN THAT OTHER CONTRACTING STATE INDEP ENDENT PERSONAL SERVICES FROM A F IXED BASE SITUATED THEREIN, AND THE RIGHT, PROPERTY OR CONTRACT IN RESPECT OF WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE PAID IS EFFECTIVELY CONNECTED WITH SUCH PERMANENT ESTABLISHMENT OR FIXED BASE. IN SUCH CAS E, THE PROVISIONS OF ARTICLE 7 OR ARTICLE 14, AS THE CASE MAY BE, SHALL APPLY. 6. ROYA LTIES AND FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARISE IN A CONTRACTING STATE WHEN THE PAYER IS THAT CONTRACTI NG STATE ITSELF, A POLITICAL SUB - DIVISION, A LOCAL AUTHORITY THEREOF OR A RESIDENT O F THAT CONTRACTING STATE. WHERE, HOWEVER, THE PERSON P AYING THE ROYALTIES OR FEES FOR TECHNICAL SERVICES, WHETHER HE IS A RESIDENT OF A CONTRACTING STATE OR NOT, HAS IN A C ONTRACTING STATE A PERMANENT ESTABLISHMENT OR A FIX ED BASE IN CONNECTION WITH WHICH THE LIABILITY TO PAY THE ROYALTIES OR FEES FOR TECHNIC AL SERVICES WAS INCURRED, AND SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE BORNE BY SUCH PERMANENT ESTABLISHMENT OR FIXED BASE, THEN SUCH ROYALTIES OR FEES FOR TECH NICAL SERVICES SHALL BE DEEMED TO ARISE IN THE CONTRACTING STATE IN WHICH THE PERMANENT ESTABLISHMENT OR FIXED BASE IS SITUATED. 7. WHERE, BY REASON OF SPECIAL RELATIONSHIP BETWEEN THE PAYER AND THE BENEF ICIAL OWNER OR BETWEEN BOTH OF THEM AND SOME OTHER PERSON, THE AMOUNT OF THE ROYALTI ES OR FEES FOR TECHNICAL SERVICES, HAVING REGARD TO TH E USE, RIGHT OR INFORMATION FOR WHICH THEY ARE PAID, EXCEEDS THE AMOUNT WHICH WOULD HAVE BEEN AGREED UPON BY THE PAYER AND THE BENEFICIAL OWNER IN THE ABSENCE OF SUCH RE LATIONSHIP, THE PROVISIONS OF THI S ARTICLE SHALL APPLY ONLY TO THE LAST - MENTIONED AMOUN T. IN SUCH CASE, THE EXCESS PART OF THE PAYMENTS SHALL REMAIN TAXABLE ACCORDING TO THE LAWS OF EACH CONTRACTING STATE, DUE REGARD BEING HAD TO THE OTHER PROVISIONS OF TH IS CONVENTION. [ EMPHASIS , BY UNDERLINING, SUPPLIED BY US] ARTICLE 14 - INDE PENDENT P ERSONAL SERVICES 1. INCOME DERIVED BY A RESIDENT OF A CONTRACTING STATE IN RESPECT OF PROFESSIONAL SERVICES OR OTHER ACTIVITIES OF AN INDEPENDENT CHARACTER SHALL BE TAXABLE ONLY IN THAT CONTRACTING STATE UNLESS HE HAS A FIXED BASE REGULARLY AVAILA BLE TO H IM IN THE CONTRACTING STATE FOR THE PURPOSE OF PERFORMING HIS ACTIVITIES OR HE IS PRESENT IN THAT OTHER CONTRACTING ST ATE FOR A PERIOD OR PERIODS EXCEEDING IN THE AGGREGATE 183 DAYS DURING ANY TAXABLE YEAR OR 'PREVIOUS YEAR' AS THE CASE MAY BE. IF HE HAS S UCH A FIXED BASE OR R EMAINS IN THAT OTHER CONTRACTING STATE FOR THE AFORESAID PERIOD OR PERIODS, THE INCOME MAY BE TAX ED IN THAT CONTRACTING STATE BUT ONLY SO MUCH OF IT AS IS ATTRIBUTABLE TO THAT FIXED BASE OR IS DERIVED IN THAT OTHER CONTRACTING STATE DU RING THE AFORESAID PE RIOD OR PERIODS. ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 5 OF 9 2. THE TERM 'PROFESSIONAL SERVICES' INCLUDES ESPECIALLY INDEPENDENT SCIENTIFIC, LITERARY, ARTISTIC, EDUCATIONAL OR TEACHING ACTIVITIES AS WELL AS THE INDEPENDENT ACTIVITIES OF PHYSICIANS, SURGEONS, LAWYERS, ENG INEERS, ARCHITECTS, DENTISTS AND ACCOUNTANTS . 7. UNDOUBTEDLY, THERE ARE OVERLAPPING AREAS IN THE DEFINIT ION OF FEES FOR TECH NICAL SERVIC ES UNDER ARTICLE 1 2(4) , WHICH COVERS ' TECHN ICAL, MANAGEMENT AND CONSULTANCY SERVICES ' VIS - - VIS THE DEFINITION OF PROF ESSIONA L S ER VICES INCOME FRO M WHICH CAN BE TAXED UNDER ARTICLE 14 AS ' INCOME FROM INDEPENDENT PERSONNEL SERVICES ' . THIS OVERLAPPING IS RECOGNIZED IN ARTICLE 12(4) ITSELF, AS IT PROVIDES THAT WHERE FEES FROM TECHNICAL SERVICES SO UG HT TO BE TAXED UNDER ARTICLE 12 I NCLUDE ANY ITE M OF INCOME WHICH IS DEALT WITH IN ARTICLE 14 , ARTICLE 12 WIL L YIELD TO THOSE SPECIFIC PROVISIONS IN RESPECT O F THAT FEE FOR TEC HNICAL SERVICE WHICH CAN BE TAXED AS INCOME FROM INDEPENDE NT SERVICES UNDER ARTICLE 14 . THAT TREAT Y APPROACH IS IN CONSONANCE W IT H THE WELL - SETT LED PR INCIPLE OF LAW CONTAINED IN THE L ATIN MA XIM GENERALIA SPECIALIBUS NON DEROGA NT , I.E. , GE N ERAL PROVISIONS DO NOT OVERRIDE THE SPECIFIC PROVI SIONS . QUITE C LEARLY, THEREFORE, WH EN A PARTICULAR TYPE OF INCOME IS SPECIFICA LLY COV ERED BY A TR EATY PROVIS ION, TH E TAXABILITY OF THAT TYPE OF INCOME IS GOVE RNED BY THE SPECIFIC PROVISIONS SO CONTAINED IN THE TREATY. HOWEVER, IT IS EQUALLY WELL SETTLE D A LE GAL POSITION THAT A TREATY IS TO BE R EAD AS WHOLE AND , THEREFORE, DIFFERENT ART ICLES CANNOT BE READ ON A STANDALONE BASIS DE HORS THE SCHEME OF THE TAX TREATY. A COORDINATE BE NCH OF THIS TRIBUNAL A N D SPEAKIN G THROUGH ONE OF US (I.E. THE VICE PRESIDENT) HAS, IN THE CASE OF HI NDALCO INDUSTRIES LTD VS A CIT [ (2005) 9 4 ITD 242 ( MUM)] , OBSE RVED THAT ' A TAX TREATY IS TO REQUIRED TO BE INTERPRETED AS A WHOLE, WHICH ESSENTIALLY IMPLIES THAT THE PROVISIONS OF THE TREA TY ARE REQUIRED TO BE CONSTRUED IN HARMONY WITH EACH OTHER ,' AND THIS PRINCIPLE W AS REITERATED IN ANOTHER COORDINATE BENCH DECISIO N IN THE CASE OF DCIT VS BOSTON CONSULTING GR OUP PTE LT D [ (2005) 94 ITD 31 (MUM)] . HON' BLE SUPREME COURT, IN THE CASE OF K.P. VARGHESE V. ITO [ ( 1981 ) 131 ITR 597 (S .C. ) ] AND EVEN IN THE CONTEXT OF THE INTERPRETATION OF TAXING STATUTES, HAVE HELD THAT THE TAS K OF INTERPRETATION IS NOT A MECHANICAL TASK AND, QUOTED WITH APPROVAL; JUSTICE HAND ' S OBSERVATION THAT 'IT IS ONE OF THE SUREST INDEXES OF A MATURE AND DEVELOPED JURISPRUDENCE NOT TO MAKE A FORTRESS OUT OF THE DICTIONARY BUT TO REMEMBER THAT STATUTES A LWA YS HAVE SOME PURPOSE OR OBJECT TO ACCOMPLISH, WHOSE SYMPATHETIC AND IMAGINATIVE DISCOVERY IS THE SUREST GUIDE TO THEIR MEANING'. WHEN SUCH ARE THE VIEWS OF THE HON ' BLE SUPREME COURT ON THE INTERPRETATION OF TAXING STATUTES, ESSENTIALLY THE TAX TREATIES , WHICH ARE TO BE SUBJECT TO LESS RIGID RULES OF INTERPRETATION, CANNOT BE SUBJECTED TO LITERAL INTERPRETATION ISOLATION WITH THE C ONTEXT IN WHICH THE PROVISIONS OF THE TREATY ARE SET OUT. WHEN WE ARE INT ER PRETING A TREATY PROVISION, WE CANNOT BE GUIDED BY ANY ONE RULE OF INTERPRETATION ALONE EVEN WHEN THE RESULTS ACHIEVED ON THAT BASIS COME IN CONFLICT WITH THE RESULTS REACHED AT BY WAY OF APPLYING THE OTHER APPLICABLE PRINCIPLES. IF WE ARE TO APPLY , FOR EXAMPLE, THE PRI NCIPLE OF GENERAL PROVISIONS MAKING WAY TO THE SPECIFIC PROVI SIONS IN THIS CASE, AND TH US HOLD THAT ONLY ARTICLE 14 W ILL COME INTO P LAY FOR THE TAXATION OF P ROFESSIONAL SERVICES, THE RES UL TS ARRIVED AT WILL BE IN CONFLICT WITH THE WELL - ESTABLISHED PRINC IPLE THAT THE TR EATY IS TO BE READ AS A WHOLE AND THE PROVISIONS OF THE TREATY ARE TO BE CONSTRUED IN HARMONY WITH EACH OTHER , INASMUCH AS W HILE ARTICLE 12(4) EXCLUSION CLAUSE PROCEED S ON THE BASIS THAT ARTICLE 14 APPLIES TO INDIVIDUALS ALONE , THE AR TICLE 14 WILL THEN BE APPLICABLE TO ALL THE ENT ITIES - INCLUDING THE PARTNERSHIP FIRMS A ND CORPORATE ENT ITIES. T HAT WILL BE CLEARLY INCONGRUOUS. IN ANY CASE, WE HAVE NOT BEEN ABLE TO FIN D EVE N ANY CONCEPTUA L JUSTIFICATION FOR E XCLUDING ONE CLASS OF ELIG I BLE TAXPAYERS , I.E. ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 6 OF 9 INDIVIDUALS, FROM THE APPLI CATION OF P ROVISIONS OF ARTICLE 12 . WHAT EVER HOLDS GOOD F OR THE EXCLUSION OF IN DIVIDUALS EARNING INCOME TAX ABLE UNDER ARTICLE 1 4 MUST HOLD GOOD FOR THE OTHER TAXPAYERS EARNING INCOME TAXABLE UNDER ARTICLE 14 AS WELL - UNLESS , OF COU RSE, ARTICLE 14 IS TREATE D AS APPLICABLE TO THE INDIVIDUALS ALONE . THEREFORE, UNLESS THE PROV ISIONS OF ARTICLE 14 ARE HELD TO BE APPLICA BLE ONLY FOR INDIVIDUALS, THE E XCLUSION CLAUSE U NDER ARTICLE 12(4) BEING CONFINED TO THE INDIVIDUALS EARNING INCOME TAXABLE UNDER ARTICLE 14 DOES NOT MAKE SE NSE . THE PRINCIPLES OF INTERPRETATION OF TREATIES, AS INDEED ANY STATUTORY PROVISION OR LEGAL DOCUMENT , ARE TO BE APPLIED IN A HOLISTIC MANNER , AND NO ONE PRINCIPLE OF INTERPRETATION, HOW SOE VER WELL ESTABLISHED, CA N HAVE PRIORITY OVER ANOTHER P RINCIPLE OF INTERPRETATION WHICH I S LEGALLY BINDING . THE PRINC IPLE OF GENERALIA SPECIALIBUS NON DEROGA NT , I.E. , GE N ERAL PROVISIONS DO NOT OVERRIDE THE SPECIFIC PROVI SIONS , IS , THEREFORE, REQUIRED TO BE READ FOR THE PURPOSES OF IN DIVIDUALS AL ONE, SO FAR AS THE PROVISIONS OF ARTICLE 1 4 ARE C ONCERNED, AS IS IMPLICIT IN THE SCH EME OF THE INDO - JAPANESE TAX TREATY AS DISCUSSED ABOVE . LET US, IN THIS BACKGROUND, TAKE A LOOK AT THE PROVISION OF ARTICLE 12(4) ONCE AGAIN. THIS ARTICLE MAKES IT CLEAR T HAT SO FAR AS TH E EXCLUSION CLAUSE OF A N INCOME FROM PROFESSIONAL ACTIVITIES I S CONCERNED, I .E. INCOME TA XABLE UNDER ARTICLE 14 AS INDEPENDENT PERSON AL S ERVICES, ONLY WHEN THE INCOME IS SO EARNED BY AN INDIVIDUAL. THE EX CLUSION CLA USE, UNDER ARTICLE 12(4), COVER S ONLY PAY MENTS TO ' TO ANY INDIVIDUAL FOR INDEPENDENT PERSONAL SERVICES REFERRED TO IN ARTICLE 14 ' . IT IS ALSO IMP OR TANT TO BEAR IN MIND THE FACT THAT THE NORMALLY AN EXCLUSION CLAUSE FOR INDEPENDENT PERSON AL SERVICES , AS EMBEDDED IN THE ARTICLE DEALING WITH THE FE ES FOR TECHNICAL SERVIC ES, WOULD CO VER ONLY WHAT IS TA XABLE U ND ER THE HEAD ' I NDEPENDENT PERSONAL SERVICES ' . IT DOES INDICATE THAT UNDER THE SCHEME OF THIS T REATY , WHAT IS TAXAB LE UNDER ARTICLE 1 4 I S ON LY THE PROFESSIONAL INCOME OF AN INDI VIDUAL AND NOT OF E NTITIES OTHER THAN INDIVIDUALS. WHILE ON THIS ASPECT OF THE MAT TER , IT IS IMPORTA NT TO TAKE NOTE OF THE FACT THAT THERE IS A SCHOOL OF THOUGH T TO THE EFFECT THAT ARTIC LE 14 COMES INTO PLAY ONLY FOR IN DIVIDUALS WHILE ARTICLE 7 I S FOR ENTITIES OTHER THAN INDIVIDUALS, AND IT IS FOR THIS REASON THAT A RTICLE 14 WAS FINALLY REMOVED FROM THE OECD MODEL CONVENTION. TAKING NOTE OF THIS POSITI ON, A COORDINATE BE NCH OF THIS TRIBUNAL, IN THE CASE OF LINKLATERS LLP VS ITO [(2011) 9 ITR (T) 217 (MUM)], HA S OBSERVED AS FOLLOWS: 105. LEARNED COUNSEL HAS ALSO CONTENDED THAT THE PROFES SIONAL SERVICES CAN ONLY BE TAXED UNDER THE HEAD ARTICLE 15 AND IN CASE CHARGEABILITY UNDER ARTICLE 15 FAILS, THAT IS END OF THE ROAD. IT CANNOT BE OPEN TO REVENUE AUTHORITIES TO TAX INCOME FROM PROFESSIONAL SERVICES UNDER ARTICLE 7. IT IS CONTENDED THAT A RTICLE 15 APPLIES ONLY TO INDIVIDUALS. AS TO THE SITUATIONS IN WHICH ARTICLE 5 WILL APPLY IN RESPECT OF THE PROFESSIONAL SERVICES AND THE SITUATIONS IN WHICH ARTICLE 15 OF THE INDIA - UK TAX T REATY, WHICH IS IN PARI MATERIA ARTICLE 14 OF THE U .N. MODEL CONVENT ION, WI LL APPLY, WE FIND GUIDANCE FROM THE FOLLOWING OBSERVATIONS MADE IN THE U .N. MODEL CONVENTION COMMENTAR Y : 'THE GROUP DISCUSSED THE RELATIONSHIP BETWEEN ARTICLE 14 AND SUB - PARAGRAP H 3(B) OF ARTICLE 5. IT WAS GENERALLY AGREED THAT REMUNERATION PAID DI RECTLY TO AN INDIVIDUAL FOR HIS PERFORMANCE OF ACTIVITY IN AN INDEPENDENT CAPACITY WAS SUBJECT TO THE PROVISIONS OF ARTICLE 14. PAYMENTS TO AN ENTERPRISE IN RESPECT OF THE FURNISHING BY THAT ENTERPRISE OF THE ACTIVITIES OF EMPLOYEES OR OTHER PERSONNEL ARE SUBJECT TO ARTICLES 5 AND 7. THE REMUNERATION PAID BY THE ENTERPRISE TO THE INDIVIDUAL WHO PERFORMED THE ACTIVITIES IS SUBJECT EITHER TO ARTICLE 14 (IF HE IS AN INDEPENDENT CONTRACTOR EN GAGED BY THE ENTERPRISE TO PERFORM THE ACTIVITIES) OR ARTICLE ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 7 OF 9 15 (IF H E IS AN EMPLOYEE OF THE ENTERPRISE). IF THE PARTIES BELIEVE THAT FURTHER CLARIFICATION OF THE RELATIONSHIP BETWEEN ARTICLE 14 AND ARTICLES 5 AND 7 IS NEEDED, THEY MAY MAKE SUCH CLARIFICA TION IN THE COURSE OF NEGOTIATIONS.' 106. WE ARE IN CONSIDERED AGREEM ENT WIT H THIS ANALYSIS IN THE U .N. MODEL CONVENTION COMMENTARY. WE ARE THUS OF THE CONSIDERED VIEW THAT, IN A SITUATION LIKE THE ONE THAT WE ARE IN SEISIN OF, I.E., IN WHICH SPECIFIC PRO VISIONS FOR PROFESSIONAL SERVICES OR INDEPENDENT PERSONAL SERVICES OR IN CLUDED SERVICES EXIST UNDER ARTICLE 15, WHEN SERVICES ARE RENDERED BY THE ENTERPRISE, ARTICLE 5(2)(K) WILL COME INTO PLAY, AND WHEN SERVICES ARE RENDERED BY AN INDIVIDUAL, ARTICLE 15 W ILL FIND APPLICATION. THEREFORE, WHILE WE AGREE WITH THE LEARNED COUNSEL THAT A RTICLE 15 WILL NOT BE APPLICABLE ON THE FACTS OF THE PRESENT CASE, THIS FINDING DOES NOT REALLY COME TO THE RESCUE OF THE ASSESSEE SINCE, AS WE HAVE ALREADY HELD, THE ASSESSEE D ID HAVE A P .E. IN INDIA UNDER ARTICLE 5(2)(K) OF THE INDIA - UK TAX TREATY, AND, AC CORDINGLY, PROFITS ATTRIBUTABLE TO THE P .E. ARE TAXABLE UNDER ARTICLE 7 OF THE INDIA - UK TAX TREATY 9 . IN VIEW OF THESE DISCUSSIONS, THERE IS A VALID SCHOOL OF THOUGHT THAT I N THE SCHEME OF THE INDO JAPANESE TAX TREATY, ARTICLE 14 FOR INDEPENDENT PER SONAL SERVICES HOLDS THE FIELD FOR THE INDIVI DUALS ONLY - PARTICULARLY IN THE LIGHT OF THE EXCLUSION CLAUSE UNDER ARTICLE 12(4) BEING RESTRICTED TO PAYMENT OF FEES FOR PROF ESSIONAL SERVICES TO INDI VID UAL S ALONE. T HERE IS NO DISPUTE THAT THE PROVISIONS OF ARTICLE 14 AND ARTICLE 12 ARE OVERLAPPING INASMUCH AS WHAT IS TERMED AS PROFESSIONAL SERVICE COULD ALSO BE COVERED BY THE FEES FOR TEC HNICAL SERVICE - PARTICULARLY AS THE DEFINITION O F TH E FEES FOR TECHNICAL SERVICES IS ON ' CLASSI CAL MODEL ' OF MUCH WIDER SCOPE AND NOT ON THE ' MAKE A VAILABLE MODEL ' NOW IN VOG UE IN MANY TAX TREATIES . THE ONLY REASON FOR WHICH EXCLUSION FROM ARTICLE 12 WAS CANVASSED B Y THE ASSESSING OFFICER WAS THAT RAT HE R SPECIFIC PROVISIONS OF ARTICLE 1 4 HAVE TO MAKE WAY FOR RATHER GENERAL PROVISIONS OF ARTICLE 12, BUT THEN WHEN WE HOLD THAT, IN THE CONTEXT OF INDO JAPAN TAX TREATY, ARTICLE 14 COMES INTO PLAY ONLY FOR IN DIVIDUALS, THIS PROPOSITION CEASES TO HOLD G OOD I N THE PRESENT CONTEXT. AS A COROLLARY TO THIS LEGAL POSITION, AND THE EXCLUSION CLAUSE UNDER ARTICLE 12(4) NOT BEING TRI GGERED ON THE FACTS OF THIS CASE AS SUCH, IT IS INDEED REASONABLY P OSSIBLE TO HOLD THAT THE PAYMENTS IN QUESTION WERE RIGHTLY SUBJECTED T O TAX WITHHOLDING IN JAPAN. THE JUDICIAL PRECEDENTS CITED BY THE AUTH ORITIES BELOW ARE IN THE CONTEXT OF THE T A X TR EAT IES OTHER THAN INDO JAPAN TAX TREATY, AN D THE PROVISIONS OF THE INDO JAPAN TAX TREATY ARE NOT IN PARI MATERIA WITH T H E PROVISIONS OF THOSE T AX TREATIES. THESE JUDICIAL PRECEDENTS DEAL WITH THE TAX TREATIES THAT INDIA HAS ENTERED I NTO WITH CHINA, U .K. AND THE U S A , B UT THEN ALL THE THREE TREATIES ARE , IN THE MATERIAL RESPECT S, DI FFERENTLY WORDED VIS - - VIS THE INDO - JAPANESE TAX TREATY THAT WE A RE PRESENTLY DEALING WITH. IT IS , THER EFORE, NOT EVEN NECESSA RY, EVEN IF WE HAVE OUR RESERVATIONS ON CORRECTNESS OF THESE DECISIONS, TO REFER THE MATTER TO THE LARGER BENCH FOR RECONSIDERATION OF THE PRINC IPLE LAID DOWN THEREIN. SUFFICE TO SAY, ON THE FAC TS OF THIS CASE, THE CONCLUSIONS ARRIVED AT BY THE JAPANESE TAX AUTHORITIES , DIRECTING TAX WITHHOLDING S FROM THE PAYMENTS MADE TO THE ASSESSEE BY ITS JAPANESE CLIENTS, CANNOT BE SAID TO UNREASONABLE OR INCORREC T . IN THE LIGHT OF T HESE DISCUSSIONS, AS AL SO BEARING IN MIND ENT IRETY OF THE CASE, WE HOLD THAT THE ASSESSEE WAS WRONGLY DECLINED TAX CREDIT OF RS 80,55,856 ON THE FACTS OF THIS CASE . WE, THEREFORE , DIRECT THE ASSESSING OFFICER TO GRANT THE SAID TAX CREDIT TO THE ASSESSEE . AS WE HA VE UPHELD THE PLEA OF THE ASSESSEE WITH RESPECT TO THE ADMISSIBILITY OF THE FOREIGN TAX CREDIT, WE SEE NO NEED ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 8 OF 9 TO DEAL WITH THE ALTERNATE PLEA OF THE ASSESSEE SEEKING DEDUCTION OF TH E TAXES SO WITHHELD ABR OAD IN THE CO MPUTATI ON OF ITS INCOME. 10. AS WE PART WITH THE MATTER, WE MAY ADD THAT , IN OUR HUMBLE UNDERSTANDING, SO FAR AS DETERMINATION OF QUESTION AS TO WHETHER OR NOT THE TAXATI ON HAS BEEN DONE IN THE SOURCE COUNTRY ' IN ACCORDANCE WITH THE PROVISIONS OF THIS CO NVENTION, MAY BE TAXED IN (THE SOURCE JURISDICTION) ' , ON E HA S TO TAKE A JUDICIOUS CALL AS TO WHETHER THE VIEW SO ADOPT ED BY THE SOURCE JURISDICTION I S A REASONABLE AND BONA FIDE VIEW, W HICH MAY OR MAY NOT BE THE SAME AS T HE LEGAL POSITION IN THE RESIDENCE JU RISDICTION. WHILE I T IS INDEED DESIRABLE THAT THERE SHO ULD BE UN IFORMITY IN TAX T REATY INTERPRETATION IN THE TREATY PARTNER JU RISDICTIONS, IT MAY N OT ALWAYS BE POSSIBLE TO DO SO IN VIEW OF A LARG E VARIETY OF VARIATION S , SUCH AS THE SOVEREIGNTY OF JUDICIAL SYSTEMS , DOMESTIC LAW OVERRIDE S ON THE TR EATY PROVISION S, THE LEGAL FRAME WORK IN WHICH THE TREATIES ARE TO BE INTERPRETED , AND THE JUDGE - MADE LAW IN T HE RESPECTIVE JURISDICTIONS ETC. I N A SITUATION IN WHICH A TRANSACTION BY RESIDENT OF ONE O F THE CONTR ACTING STAT E S IS TO BE EXAMINED IN BOTH THE TREATY PAR TNER JU RISDICTIONS, FROM THE POINT OF VIEW OF T AXABILITY OF INCOME ARISING THEREFROM, DIFFERENT TREATMENTS BEING G IVEN B Y THE TREATY PARTNER JURISDICTIONS WILL RESULT IN INCONGRUITY AND UNDUE HAR DSHIP TO THE ASSESSEE . ON THE SUBJECT UNIFORMITY OF INTERPRETATION IN THE TREATY PARTNER JURISDICTIONS , LORD DENNING , IN THE CASE OF COROCRAFT, SAID: ' IF SUCH BE THE VIEW OF THE AMERICAN COURTS, WE SURELY SHOULD TAKE THE SAME VIEW. THIS CONVENTION SHOULD BE GIVEN THE SAME MEANING THROUGHOUT ALL THE COUNTRIES WHO WERE PAR TIES TO IT ' (1 Q.B . 616 ). THE IMPORTANCE OF UNIFORMITY OF INTERPRETATION OF EXPRESSIONS WHICH ARE USED IN GLOBAL TREATY NETWORKS CAN THUS HARDLY BE OVEREMPHASIZED. AS WAS SAID IN THE FEDERAL COURT IN CANADIAN PACIFIC LTD. V. QUEEN 76 DTC 6120 AT P. 6135) I N INTERPRETING THE 1942 CANADA - US TREATY , 'WHILE IT IS TRUE THAT THIS COURT HAS THE RIGHT TO INTERPRET THE CANADA - US TAX CONVENTION AND PROTOCOL ITSELF AND IS NO WAY BOUND BY THE INTERPRETATION GIVEN TO IT BY THE UNITED STATES TREASURY, THE RESULT WOULD BE UNFORTUNATE IF IT WERE INTERPRETED DIFFER ENTLY IN THE TWO COUNTRIES WHEN THIS WOULD LEAD TO DOUBLE TAXATION. UNLESS, THEREFORE, IT CAN BE CONCLUDED THAT THE INTERPRETATION GIVEN IN THE UNITED STATES IS MANIFESTLY ERRONEOUS IT IS NOT DESIRABLE TO REACH A D IFFERENT CONCLUSION, AND I FIND NO COMPELL ING REASON FOR DOING SO .' THAT SITUATION IS TO BE BEST AVOIDED, AND IT CAN ONLY BE SO AVOIDED WHEN UNLESS THE VIEW OF THE TREATY PARTNER JURISDICTION I S WHOLLY UNREASONABLE OR, TO BORROW THE WORDS OF CAN A DIAN F E DER AL COURT , ' MA N IFESTLY ERRONEOU S ,' IT SH OULD BE ADOPTED, AT LEAST IN RESPECT OF THAT TRANSACT ION, BY THE OTHER TREAT Y PARTNER AS WELL. HERE IS A CASE IN WHICH NOT ONLY THE SOURCE COUNTRY JURISDICTION HAS TAKEN THE VIEW THAT THE LEGAL FEES RECEI VED BY THE A SSE SSEE ARE TA XABLE UNDER ARTICLE 12 OF THE INDO JAPAN TAX TREATY, BUT, AS DISCERNABLE FROM THE FACTS AS RECORDED BY THE AUTH ORITIES BELOW, THE J APANESE TAX AU THORITIES HAVE CO NSCIO USLY TAKEN A CALL REJECTING THE PLEA OF THE ASSESSE E FOR N ON - TAXATION, AND EVEN PROCEEDED A GAINST THE ASSESSEE ' S JAP ANESE CLIENTS FOR INTEREST AND PENALT IES FOR NON - DEDUCTION OF TAX AT SOURCE FROM THE PAYMENTS IN QUESTION. THIS VIEW, IN THE LIGHT OF THE DETAILED REASONS SET OUT ABOVE, IS A REASONABLE VIEW IN THE CONTEXT OF INDO J APAN TAX TREATY AND, AT THE MINIMUM, NOT A ' MANIFEST LY ERRO NEOUS . ' IT IS NOT EWO RTHY THAT IN THE OECD MODEL CONVEN TIONS COMMENTAR IES, WH ICH ARE JUDICIALL Y HELD TO BE IN THE NATURE OF CONTEMPORANEA EXPOSITI O IN INDI A AND WHICH OUR HON ' BLE COURTS ABOVE HA VE R EFERRED TO, WITH A GREAT DEGREE TO RESPECT AND APPROVAL , F ROM TO TIME IN TAKING CALLS ON THE PROVISIONS RELATING TO THE TAX T REATIES, ALSO IT IS STATED, AS WE HA VE NOTED EARLIER AS WELL , THAT ' ARTICLE 23 A AND A RTICLE 23 B, HOWEVER, DO NOT REQUIRE THAT TH E STATE OF RESIDENCE ELIMINATE DOUBLE TAXATION IN ' ALL CASES ' WHERE THE STATE OF SOURCE HAS IMPOSED ITS TAX BY APPLYING TO AN ITEM OF INCOME A PROVISION OF THE CONVENTION THAT IS DIFFERENT FROM THAT WHICH THE STA TE OF RESIDENCE CONSIDERS TO BE APPLICABLE ' [EMPHASIS, B Y UNDERLINING, SUPPLIED BY US] . T HEREFORE, IT WAS A ITA NO. 2613/MUM/19 ASSESSMENT YEAR: 2014 - 15 PAGE 9 OF 9 POSITION WELL VISUALIZED BY THE MULTILATERAL BODIES , DEVELOP ING THE TREATY PROVISION IN QUESTION, THAT IN ALL THE CASES IN WHICH THE INTERPRETATION OF THE RESIDENCE COUNTRY ABOUT THE APP LI C ABILITY OF A TREATY PROVISION IS NOT THE SAME AS THAT OF THE SOURCE JURISDICTION ABO UT THAT PROVISION, AND YET THE SOU RCE COUNTRY H AS LEVIED TAXES - WHETHER DIRECTLY OR BY WAY OF TAX WITHHOLDING, THE TAX CREDIT CANNOT BE DECLINED. TO PUT A QUESTION TO OURSE L VES , WH AT COULD P OSSIBLY BE THE SITUATIONS IN WHICH VIEWS OF THE SOURCE AND RESIDENC E JURISDICTIONS MAY DIFFER ABOUT THE APPLICABILITY OF A TREATY TAXATION PROVISION , AND YET THE RESIDENCE COUNTRY COULD STILL PROVID E THE RELATED TAX CREDIT S. IN OUR HUMBL E UNDERSTANDING , FOR THE DETAILED REASONS SET OUT ABOVE, THESE ARE THE CASES IN WHICH THE TREATY PARTNER SOURCE JURISDICTION HAS T AKEN A REASONABLE BONA FIDE VIEW WHICH IS NOT MANIFESTLY ERRONEOUS - EVEN THOUGH IT IS NOT THE SAME AS IS THE VIEW TAKEN BY THE RESID ENCE JURISDICTION. THAT ASPE CT ALONE , HOWEVER, IS NOT THE SO LE DETERMINAT I V E FACTOR IN THE PRESENT CONT EXT SINCE WE HA VE AL READY HELD THAT , ON THE PECULIARITIES OF INDO JAPANESE TAX TREAT Y PROVISIONS, THE LEGAL FEES PAID TO A PARTNERSHIP FI RM OF LAWYE RS CAN INDEED BE SUBJECT ED TO LEV Y OF TAX UNDER ARTICLE 12 AS THE EXCLU SION CLAUSE UNDER ARTICLE 12(4) DOES NOT GET TRIGGERED FOR PAYMENTS TO PERSONS OTHER THAN INDIVIDUALS , AND THE PROVISIONS OF ARTICLE 14 ARE REQUIRED TO BE READ IN HARMONY WITH THE PROVI SIONS OF ARTICLE 12(4). 11 . . IN THE RES ULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED A B OVE. PRONOUNCED IN THE OPEN CO URT TODAY ON THE 18 TH DAY OF DECEMBER , 2 020. SD/XX SD/XX PAVAN KUMAR GADALE PRAMOD KUMAR ( JUDICIAL MEMBER ) (VIC E PRESIDENT) MUMBAI, DATED THE 18 TH DAY OF DECEMBER , 20 20 COPIES TO: (1) THE APPELLANT ( 2) THE RESP ONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUN AL MUMBAI BENCHES, MUMBAI