DY. COMMR. OF INCOME TAX, UJJAIN vs M/S TORQOUISE INVESTMENT & FINANCE LTD.

The Supreme Court upheld the decision of the Income Tax Appellate Tribunal (ITAT) that dividend income earned by the assessee from a Malaysian company is not taxable in India under the Income Tax Act, 1961, specifically referencing Section 5(1)(c). The Court affirmed that the Double Taxation Avoidance Agreement (DTAA) between India and Malaysia takes precedence over domestic tax provisions when there is a conflict. The Court dismissed the Revenue's appeal, thereby maintaining the ITAT's ruling that the income was not liable to tax in India.