Certificates issued by Singapore Tax Authorities is sufficient evidence for accepting legal position

CIT Vs Citicorp Investment Bank (Bombay High Court)

Bombay High Court held that certificates issued by the Singapore Tax Authorities certifying that capital gain income would be brought to tax in Singapore is sufficient evidence for accepting the legal position.

Facts- The assessee, i.e., respondent is a tax resident of Singapore. The assessee is registered as a Foreign Institutional Investor (FII) in debt segment with Securities and Exchange Board of India (SEBI). The assessee has been investing in debt securities in India during the year in consideration, which is A.Y.-2010-2011. The assessee filed its return of income declaring a capital gain of Rs.86,62,63,158/- on the sale of debt instruments and claimed exemption under Article 13(4) of India-Singapore Double Taxation Avoidance Agreement (DTAA). During the assessment, the assessee was asked to explain as to how the provisions of Article 24 of DTAA stood complied in order to claim capital gain as exemption in India.

ITAT allowed the appeal of the assessee concluding that the assessee was entitled to the benefit of Article 13(4) of DTAA between India and Singapore.

Conclusion- Held that Singapore authorities have themselves certified that the capital gain income would be brought to tax in Singapore without reference to the amount remitted or received in Singapore. The AO could not have come to a conclusion otherwise. As stated in the circular No.789 dated 13th April 2000, though it applied to Indo-Mauritius Double Tax Avoidance Convention with reference to certificate of residence, the purport and principle is clear. Such certificates issued by the Singapore Tax Authorities will constitute sufficient evidence for accepting the legal position.

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