Metal One Corporation India Private Limited Vs DCIT (ITAT Delhi)
DDT Cannot Exceed Treaty Rate Because Tax Treaty Prevails Over Domestic Law; ITAT Grants Refund Claim on Excess DDT Because Treaty Rate of 10% Applied to Foreign Shareholders; Corporate Club Membership Fees Allowed as Business Expenditure Because Used for Business Purposes; ITAT Rejects Revenue Stand on DDT Because Treaty Protection Applies to Dividend Payments; DTAA Benefit Available on Dividend Distribution Tax Because DDT Covered Within Income Tax.
In , the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dealt with appeals filed by Metal One Corporation India Private Limited for Assessment Years (AYs) 2017-18 and 2018-19 against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi.
The assessee, engaged in import, export, and trading of steel and allied products, had originally claimed depreciation on goodwill arising from acquisition of the metal division of Mitsubishi Corporation India Limited. The Assessing Officer (AO) disallowed the depreciation claim on the ground that the assessee had not submitted a valuation report and that the additional payment may have related to fair value of assets, non-compete arrangements, or business connections rather than goodwill. The CIT(A), however, allowed the depreciation claim.
