Assessee is a Limited Liability Company (LLC) incorporated in USA. Assessee claimed to be a resident of USA and offered to tax income by way of receipts on account of fees at rate of 15 per cent, applying rate given in India-USA DTAA.Assessing Officer held that LLCs were fiscally transparent entities according to US tax law, i.e., their income is not subject to tax in their own hands in USA and such corporations, therefore, did not qualify as residents of USA in terms of Article 4 of India-USA DTAA. He, accordingly, proceeded to bring to tax returned income of assessee at rate of 25 per cent. DRP affirmed the order of the AO. On appeal  the Tribunal held that  under US federal income tax law, an LLC with a single owner was disregarded as separate from its owner unless LLC elected to be treated as a corporation for US federal income tax purposes-Ability of LLC to elect its tax classification under US federal income tax law also supported legal situation or aspect of LLC being liable to tax. Further, where a LLC was disregarded as separate from its tax owner for US federal income tax purposes, tax owner of LLC paid tax on tax owner’s share of taxable income attributed from LLC. Assessee being a resident under Article 4 of Indo-US Tax Treaty by virtue of incorporation and its recognition as a separate existence from its members qualified as a person.  Accordingly the   assessee is  liable to tax in resident State by virtue of US Income-tax Law  hence the  tax authorities had fallen in error in not extending treaty benefit to assessee. (AY. 2014-15, 2015-16)