Case Law Details
DCIT Vs HSBC Bank (Mauritius) Ltd. (ITAT Mumbai)
The issue under consideration is whether as per India-Mauritius DTAA, Interest Income from Foreign Currency loan and Securities would be eligible to tax in India?
In the present case, the assessee, is a limited liability company incorporated, registered and a tax resident in Mauritius are a Foreign Institutional Investor (FII) duly registered as such by the Securities and Exchange Board of India (SEBI). The assessee had e-filed its return of income for Assessment Year, declaring its total income at Rs. Nil. Subsequently, the case of the assessee was selected for scrutiny assessment under Section 143(2) of the Act. As the assessee had not offered the aforesaid interest income for tax in India, therefore, the A.O called upon it to put forth an explanation as to on what basis the said amount was claimed to be not exigible to tax in India.
In our considered view, the issue involved in the present appeal i.e as to whether Article 11(3)(c) would be applicable in the fact pattern of the case of the assessee before us, as rightly pointed out by the ld. A.R is squarely covered by the orders passed by the Tribunal in the assessee‟s own case for the preceding years, wherein dealing with identical facts for the said respective years the Tribunal had consistently concluded that pursuant to Article 11(3)(c) of the India-Mauritius tax treaty the interest receipt would not be exigible to tax in India.
ITAT states that, the assessee that assessee is the ‘beneficial owner’ of the impugned interest income on the strength of the Tax Residency Certificate issued by the Mauritian authorities. The Co-ordinate Bench in an unequivocal manner has held that the assessee is a ‘beneficial owner’ of the interest income. Undisputedly, the nature of interest income in assessment year under appeal is no different preceding assessment years. Ergo, they do not concur with the argument of ld. Departmental Representative that the Tribunal has not considered the fact in the past that the interest is not beneficially owned by the assessee. In the light of decision of the Co-ordinate Bench on the issue raised in the appeal by Revenue , ITAT find no infirmity in the impugned order. The CIT(A) has granted relief to the assessee by following the order of Tribunal in passed in previous years. The impugned order is upheld and the appeal by the Revenue is dismissed.
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