The High Court delivered a ruling dated 21 January 2006 in the case of Commissioner of Income Tax v. M/s Reiter Ingolsteadt Spinnereimaschinenbau AG (unreported) on whether a lump-sum payment is taxable in India at a 20% rate under the India-Germany tax treaty (the tax treaty).
(a) Facts. The taxpayer (i.e. Reiter Ingolsteadt Spinnereimaschinenbau AG) was a German company and had received a down payment from an Indian company for the transfer of technical know-how. The t…