Treaty Overrides Domestic Law: Section 40(a)(i) Disallowance Unjustified

DDIT Vs Unocol Bharat Ltd. (ITAT Delhi) Income Tax Appellate Tribunal (ITAT), Delhi, in the case of DDIT vs. Unocol Bharat Ltd., addressed key questions surrounding the interplay between the Income Tax Act, 1961, and the Double Taxation Avoidance Agreement (DTAA) between India and Mauritius, particularly concerning the disallowance of business expenses for non-residents operating through a Permanent Establishment (PE) in India. The tribunal’s ruling, in an appeal filed by the revenue against the order of the CIT(Appeals), focused on the applicability of Section 40(a)(i) of the Income Tax...