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Only because the other party has made a notional provision in its books and made a deduction of tax and the amount is reflecting in 26AS and especially when the receipt of such income is fraught with uncertainties as parties are in dispute and litigations are pending for past so many years and there is no likelihood of end of the litigation in near future then it cannot be said that the assessee has received any royalty income qua helicopters lease agreement , either under the domestic law or under the treaty provisions. 106ITR (Trib) (SN) 16. 


The AO had treated an amount of Rs. 5,28,58,080/- as royalty income of the assessee during the year purely based on the amount shown in Form 26AS. In reality the assessee did not receive even a single rupee towards lease income.  The CIT(A) has restricted the addition to Rs.1,43,59,792/- purely based on the invoices raised by the assessee.


Setting aside the addition the Tribunal went by the real income premise without dealing into merits of the case being whether helicopter lease consideration is royalty or not.   Per ITAT in this situation the revenue could tax at best the amount of Tds reflecting in 26AS which even were not possible in this case with assessee not having any PE in India. 


This decision may be useful to salaried employees for taxation of unpaid amounts as anything not paid is a mere notional income only. 






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