The assessee had received income tax refund. In the return of income the assessee offered the interest at the rate of 10 percent as per Article 12 of DTAA between India and France. The Assessing Officer assessed the interest as business income in terms of Article 7 read with Paragraph 5 of Article 12 of the DTAA. DRP affirmed the order of the Assessing Officer. On appeal the Tribunal held that  interest on income-tax refund is  not effectively connected with permanent establishment either on basis of asset-test or activity-test, it could not be taxed under article 7 but was to be taxed under article 12 of India-France DTAA. (AY. 2018-19)