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March 2025

Article 11 India-Luxembourg DTAA – Assessee, having satisfied that it is not a conduit entity, is entitled to the benefits under DTAA and considering commercial and economic substance.

By Geeta Jani | Dhishat B Mehta | K. Prasanna, Chartered Accountants
Reading Time 3 mins

15. [2025] 170 taxmann.com 475 (Delhi - Trib.)

SC Lowy P.I. (LUX) S.A.R.L. vs. ACIT

ITA No: 3568 (Delhi) of 2023

A.Y.: 2021-22

Dated: 30th December, 2024

Article 11 India-Luxembourg DTAA – Assessee, having satisfied that it is not a conduit entity, is entitled to the benefits under DTAA and considering commercial and economic substance.

FACTS

Assessee is a Limited Liability Company and a tax resident of Luxembourg. The Assessee is a subsidiary of a Cayman Island entity and a step-down subsidiary of an offshore fund located in the Cayman Islands. The Assessee is registered as a Category II – Foreign Portfolio Investor registered with SEBI, who has invested in corporate bonds and pass-through certificates of securitization trust.

It offered the interest income from bonds at 10% under Article 11 and claimed treaty benefits with respect to business income and capital gains under Article 7 and Article 13(6) of DTAA, respectively.

The AO verified the financial statements, SEBI registration, a

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