[2013] 34 taxmann.com 21 (Mumbai-Trib.) Abacus International (P.) Ltd. vs. DDIT A.Ys.:2004-05, Dated: 31.05.2013 Article 11, 24 of India-Singapore DTAA;section 115A

Facts:
•The taxpayer was a company resident of Singapore engaged in the business of Computerized Reservation System (CRS). Its primary business was to make airline reservations for and on behalf of the participating airlines using CRS.

• During the year under consideration, the tax authority granted tax refund to the taxpayer together with interest thereon. Relying on Article 11 of India-Singapore DTAA, the taxpayer contended that the interest should be chargeable to tax @15% and not @20% u/s. 115A of the Act. However, the taxpayer did not provide any supporting evidence about the same having been credited in its Singapore bank account.

Held:
• Article 24(1) of India-Singapore DTAA provides that “……reduction of tax to be allowed under this agreement…. shall apply to so much of the income as is remitted to or received in that Contracting State.” Thus, receipt or remittance of income in Singapore is sine qua non for claiming the benefit of lower rate of tax on the interest income from India.

• Not having a bank account in India does not mean that the taxpayer had received the amount in Singapore. The taxpayer is under an obligation to provide evidence of remittance or receipt of the interest in Singapore.

• Since the taxpayer has not provided such evidence, the benefit of reduced rate under Article 11 was not available and the income was to be taxed as per the Act (i.e., as per section 115A).