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| The Tax Publishers2023 TaxPub(DT) 1115 (Del-Trib) INCOME TAX ACT, 1961
Section 90
Even treatment of assessee-company as 'Shell' or 'conduit' also did not hold any water in as much as the veracity of the expenditure incurred by the assessee in Singapore was a subject-matter of tax scrutiny in Singapore and same had been accepted to be genuine by the Singapore tax authorities as per tax assessment orders mentioned elsewhere. Assessee furnished a valid tax residency certificate issued by Inland Authority of Singapore, audited financial statements and return of income filed along with tax assessment orders by Singapore Tax Authority, therefore AO was directed to delete impugned disallowance and allow treaty benefit to assessee as per relevant provisions of the law.
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Double taxation relief - Agreement between India and Singapore - STCG on sale of shares earned by non-resident - AO denied assessee the benefit under article 13(4A) of India-Singapore DTAA on the ground that assessee had no economic substance or commercial substance and was a 'shell' or a 'conduit' company
Assessee based at Singapore claimed that short-term capital gain which has arisen due to sale of shares of Dr. Fresh Healthcare (P) Ltd. was not taxable as per article 13 of India-Singapore DTAA, therefore, entire TDS deducted by VIC Enterprises Private Limited from of sale consideration of shares was liable to be refunded to assessee AO denied assessee the benefit under article 13(4A) of India-Singapore DTAA on the ground that asses see had no economic substance or commercial substance and it was a 'shell' or a 'conduit' company. Held: Though domestic GAAR provision were applicable, however, tax on short-term capital gain was below the threshold set out in rule 10U(1)(a) further impugned shares were acquired by assessee on 22-8-2016 which was prior to the cut-off date set out in rule 10U(1)(d). AO also invoked the doctrine ''substance over form' to deny benefit of Article 13(4A). The said doctrine was prior to the codification of domestic GAAR and the legislators were conscious enough when they were providing exemptions under Chapter X-A. Even treatment of assessee-company as 'Shell' or 'conduit' also did not hold any water in as much as the veracity of the expenditure incurred by the assessee in Singapore was a subject-matter of tax scrutiny in Singapore and same had been accepted to be genuine by the Singapore tax authorities as per tax assessment orders mentioned elsewhere. Assessee furnished a valid tax residency certificate issued by Inland Authority of Singapore, audited financial statements and return of income filed along with tax assessment orders by Singapore Tax Authority, therefore AO was directed to delete impugned disallowance and allow treaty benefit to assessee as per relevant provisions of the law.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2018-19
IN THE ITAT, DELHI D BENCH
N. K. BILLAIYA, A.M. & ANUBHAV SHARMA, J.M.
Reverse Age Health Services Pte Ltd. v. DCIT
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