December 2023
Article 13(4) of old India-Mauritius DTAA – Having failed to establish that assessee is a conduit, basis TRC issued by tax authorities, the assessee is a tax resident of Mauritius and is entitled to DTAA benefits
By Geeta Jani | Dhishat B Mehta | Bhaumik Goda, Chartered Accountants
Reading Time 2 mins
9 Veg N Table vs. DCIT
TS-657-ITAT-2023 (Del)
ITA No.: 2251/Del/2022
A.Y.: 2018-19
Date of Order: 31st October, 2023
Article 13(4) of old India-Mauritius DTAA –— Having failed to establish that assessee is a conduit, basis TRC issued by tax authorities, the assessee is a tax resident of Mauritius and is entitled to DTAA benefits.
FACTS
Assessee, a Mauritius-based investment holdingcompany, sold shares of Indian Company (ICO) and claimed exemption under Article 13(4) of India-Mauritius DTAA. Shares were acquired prior to 1st April, 2017. Assessing Officer (AO) denied exemption noting that:a) ICO was 75 per cent held by UKCO and 25 per centby Canadian individuals b) there were no operatingincome or expense in the books of the assesse since the date of investment c) no remuneration was paid to directors d) two out of three directors held a number of directorships e) Third director was a Canadian individual who was ultimate beneficial owner f) there is no commercial rationale for establishing a company in Mauritius.
The assessee appealed to DRP. DRP upheld the order of AO.
Being aggrieved, the assessee appealed before the Tribunal.
HELD
Assessee holds valid TRC and should be treated as a