COMMISSIONER OF INCOME TAX vs P.V.A.L. KULANDAGAN CHETTIAR (DEAD) THROUGH LRS.

The Supreme Court ruled that income earned in Malaysia by a firm cannot be taxed in India based on the agreement for avoidance of double taxation between India and Malaysia, specifically under Article 7(1). The Court held that without a permanent establishment in India, the business income and capital gains from properties situated in Malaysia are not subject to Indian tax. The decision of the High Court affirming the Tribunal's ruling was upheld, emphasizing the importance of adhering to international tax agreements to prevent double taxation.