The Tax Publishers2021 TaxPub(DT) 1238 (Del-AAR) : (2021) 279 TAXMAN 0122

INCOME TAX ACT, 1961

Section 245R

If the applicant has raised question to avail treaty benefit in respect of its tax liability under section 115-O. it cannot be considered as a transaction designed for avoidance of tax.

Advance ruling - Admissibility of application - Ruling sought on treaty benefit, whether can be regarded as a device to avoid tax -

Assessee sought ruling on the application of beneficial provision of India-Singapore DTAA in respect of DDT on dividend paid/payable to non-resident shareholder. Revenue submitted that as per provision of section 115-O, DDT is an incidence of tax on the company and not on the shareholder and the transaction was designed prima facie for avoidance of tax. Held: There was not found any design to avoid tax by any illegal or improper means. The objection of the Department was found to be rather on merits of the questions raised in the present application. An Identical issue was considered in the case of Signify Innovations India Private Ltd. [2021 TaxPub(DT) 1180 (Del-AAR)] wherein it has been held that, if the applicant has raised question to avail treaty benefit in respect of its tax liability under section 115-O. It cannot be considered as a transaction designed for avoidance of tax. Following that ruling, the application is admitted under section 245R.

Followed:Signify Innovations India Private Ltd. [2021 TaxPub(DT) 1180 (Del-AAR)].

REFERRED :

FAVOUR : In favour of assessee

A.Y. :



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