Article 13 of India-Cyprus DTAA – Investment Holding Company located in Cyprus is a tax resident of Cyprus – qualifies for benefit under Article 13 of DTAA in respect of gain arising from sale of shares of Indian company.

5. [2025] 174 taxmann.com 498 (Delhi - Trib.)

Gagil FDI Ltd. vs. ACIT

ITA NO.2661/Delhi/2024

A.Y.: 2021-22 Dated: 7 May 2025

Article 13 of India-Cyprus DTAA – Investment Holding Company located in Cyprus is a tax resident of Cyprus – qualifies for benefit under Article 13 of DTAA in respect of gain arising from sale of shares of Indian company.

FACTS

The Assessee was incorporated as an investment holding company and wholly owned subsidiary of GA Global. Both entities were residents of Cyprus. Cyprus tax authority had granted a tax residency certificate to the Assessee. The Assessee had pooled investments from various investors across the globe. During the relevant AY, the Assessee had earned long-term capital gain aggregating to ₹959 Crores from sale of shares of National Stock Exchange India Limited (NSEIL). The Assessee contended that in terms of Article 13(5) of India-Cyprus DTAA, gains were taxable only in Cyprus. The Assessee further contended that in terms of Article 10(2) of India-Cyprus DTAA, dividend earned by it from Indian companies qualified for benefit of lower rate of tax.