Indian decision on applicability of tax treaty or domestic tax rate for different income streams

The Indian Income Tax Appellate Tribunal (ITAT) delivered a ruling in the case of Morgan Stanley Asset Management Inc. v. Joint Commissioner of Income Tax (6 SOT (Mumbai)) dated 22 November 2005 (reported in June 2006) dealing with the issue of whether the company would be eligible for preferential rate of tax for a particular head of income.

(a) Facts. The taxpayer (i.e. Morgan Stanley Asset Management Inc.) was a company registered in the United States and r…