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| The Tax Publishers2020 TaxPub(DT) 2829 (Mum-Trib) : (2020) 084 ITR (Trib) 0360 INCOME TAX ACT, 1961
Section 90
As assessee was a licensed bank carrying on bona fide banking business in Mauritius, interest income received by it on securities (including interest on T Bills and rupee denominated bonds of Indian companies) and interest income on ECBs was not exigible to tax in India as contemplated in Article 11(3)(c) of Indo-Mauritian DTAA especially when assessee in terms of CBDT Circular No. 789, dated 13-4-2000, furnished Certificate of Residence issued by Mauritian Authorities.
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Double taxation relief - Agreement between India and Mauritius - Taxability of interest income on foreign currency loans and debt securities received by Mauritian entity -
Assessee a limited liability banking company Mauritius was a Foreign Institutional Investor 'FII') duly registered as such by 'SEBI'. It received Interest income on securities (including interest on T Bills and rupee denominated bonds of Indian companies) and interest income on External Commercial Borrowings (ECB). AO taxed the same. Held: As assessee was a licensed bank carrying on bona fide banking business in Mauritius, it had thus derived interest income as contemplated in Article 11(3)(c) of Indo-Mauritian DTAA. In so far requirement that interest income arising in Contracting State i.e. India should be beneficially owned by assessee was concerned, in terms of CBDT Circular No. 789, dated 13-4-2000, Certificate of Residence issued by Mauritian Authorities, constituted sufficient evidence for accepting status of residence as well as beneficial ownership for applying the DTAA. Accordingly, as per article 11(3)(c) of DTAA interest income was not exigible to tax in India.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, MUMBAI BENCH
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