The claim of the assessee has been examined. It was seen that only in this particular year the assessee has made the claim of refund of taxes deducted in USA and Canada. In this matter reliance is placed in the judgment of Hon'ble ITAT, Mumbai bench case of Jt.CIT Vs. Digital Equipments India Ltd. reported in 277 ITR (AT) 15 (Mum).2005. The Hon'ble Tribunal has discussed the issue in under consideration in detail. The facts of the case of the assessee and of the Digital Equipment (Supra) is identical. In the case of Digital Equipments the assessee company paid taxes in the source country but actually incurred loss when all the admissible deduction in respect of that earning were taken into account. In this case also the assessee company paid withholding taxes in the source country (USA & Canada) and is having losses in India. To quote from the Hon'ble Tribunal's decision, "in the case before us the assesses company had paid taxes in respect of that earning only in one country i.e., United States and claim losses, on taking into account the admissible deduction there from, in the other country, i.e., India. This is surely not, by any stretch of logic of a case of double taxation of income." The ratio of the judgment of the Hon'ble Tribunal is that if any income is not taxable in India, the refund of withholding taxes cannot be granted to the assessee in India. As can be seen from the facts of the case enumerated above that the assessee company is claiming exemption u/s 10A in respect of profits of Mumbai unit. Only during this year the assessee had loss and therefore, the assessee claiming refund of taxes deducted in USA & Canada."
