If thin capitalization rules are not in the domestic law/Treaty, there can be not be artificial disallowance of interest paid on borrowings

Court: Mumbai Tribunal Citation: Besix Kier Dabhol, SA Vs. DDIT Brief- This is an important decision of the Tribunal, which brings out the importance of a Double Taxation Avoidance Agreement (Treaty), that where thin capitalization rules are not in the domestic law/Treaty, there can be no artificial dis allowance of interest paid on borrowings. Facts: Besix Kier, Dabhol (assessee), a company registered under the laws of Kingdom of Belgium, was engaged in the business of carrying out project of construction of fuel jetty and a backwater near Dabhol, India, pursuant to a contract entered into by...