Case Law Details
Reverse Age Health Services Pte Ltd. Vs DCIT (ITAT Delhi)
ITAT Delhi held that the provisions of a DTAA (Double Taxation Avoidance Agreement) supersedes the provisions of the income tax Act in case their application is more beneficial.
Facts- Return of the assessee was selected for complete scrutiny because of the high ratio of refund of TDS. The tax deducted at source by M/s. VIC Enterprises Private Limited was on account of sale consideration of the sale of shares of Dr. Fresh Healthcare Private Limited by the assessee. These shares were acquired by the assessee on 22.08.2016 and were sold on 02.01.2018 giving rise to STCG of Rs.1,92,63,473/-.
The assessee claimed that STCG which has arisen due to sale of shares of Dr. Fresh Healthcare Private Limited are not taxable as per Article 13 of India – Singapore DTAA, therefore, the entire TDS of Rs.10939285/- has been claimed as refund.
The AO/ DRP denied the assessee the benefit under Article 13 (4A) of the India – Singapore DTAA on the ground that the assessee had no economic substance or commercial substance and that it was a “shell” or a “conduit” company. For this purpose, Article 3 (1) of the 2005 protocol to the India- Singapore DTAA was invoked (which is now incorporated as Article 24A(1) of the India- Singapore DTAA) and, therefore, STCG of Rs.1,92,63,473/-was held to be taxable in India in the hands of the assessee.
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