Case Law Details
Comstar Mauritius Limited Vs CIT (IT) (ITAT Mumbai)
ITAT Mumbai held that benefit of Article 13(4) of India Mauritius tax Treaty duly available to Mauritius registered assessee, having Tax Residency Certificate, for sale of shares which were acquired prior to 1st April 2017.
Facts- Assessee is a non-resident foreign company based on Mauritius and is in the business of investment in securities. During scrutiny, AO noted that assessee has sold Indian securities and earned capital gain on the same. Its income consists of gain on sale of such securities, which has been claimed as exempt in view of Indo Mauritius Double Taxation Avoidance Agreement (DTAA). Accordingly, assessment order was passed accepting the return of income ₹ nil as assessed income.
Thereafter, a show cause notice was issued u/s. 263 of the Act holding that AO has not conducted any enquiry to ascertain whether the capital gain on sale of share claimed as exempt as per Article 13 was allowable or not. CIT concluded that order of AO is erroneous and prejudicial to the interest of revenue. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessment order passed by the learned Assessing Officer granting benefit of Article 13 to the assessee on shares acquired prior to 1st April 2017, is after making due enquires and further same is also made in accordance with the press release of Central Board of Direct Taxes , hence, cannot be considered to be erroneous insofar as it is prejudicial to the interest of the Revenue. In view of this, we quash the revisionary order passed by the learned CIT under Section 263 of the Income- tax Act, 1961.
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