March 2023
Article 13(4A) of India – Singapore tax treaty – Tax authorities cannot go behind TRC issued by Singapore tax authorities. Gain on sale of shares acquired prior to 1st April, 2017 is not taxable in India.
By Geeta Jani | Dhishat B. Mehta | Bhaumik Goda
Chartered Accountants
18 Reverse Age Health Services Pte Ltd vs. DCIT
[TS-67-ITAT-2023(Del)]
[ITA No: 1867/Del/2022]
A.Y.: 2018-19
Date of order: 19th February, 2023
Article 13(4A) of India – Singapore tax treaty - Tax authorities cannot go behind TRC issued by Singapore tax authorities. Gain on sale of shares acquired prior to 1st April, 2017 is not taxable in India.
FACTS
The assessee, a tax resident of Singapore, sold shares of an Indian Company (ICO). It claimed a refund of TDS on the grounds that capital gain income is not taxable in India as per Article 13 of India – Singapore DTAA3. AO denied benefit under Article 13(4A) of the India – Singapore DTAA on the grounds that the assessee had no economic or commercial substance and that it was a “shell” or a “conduit” company as per Article 3(1) of protocol to India-Singapore DTAA4. DRP upheld AO’s order.
Being aggrieved, the assessee filed an appeal to ITAT.
HELD
- ITAT placed reliance on Delhi High Court decision in the case of Black Stone Capital Partners5 which held that Indian tax authorities cannot go behind TRC issued by Singapore tax authorities.
ITAT took note of the following facts and documents and granted benefit of capital gains exemption under Article 13 of DTAA.
The assessee furnished TRC for relevant year issued by Singapore Tax a
