Case Law Details
ITO Vs Tata Teleservices Limited (Delhi High Court)
In the case of ITO Vs Tata Teleservices Limited, the Revenue appealed against the Commissioner of Income Tax (Appeals)-43’s order, which had reversed the Assessing Officer’s (AO) decision regarding the taxability of interest payments made to the China Development Bank (CDB). The AO argued that these payments were not exempt under Article 11(3) of the India-China Double Taxation Avoidance Agreement (DTAA). However, the appellant’s representative noted that a previous ruling from a Coordinate Bench had already determined that CDB qualifies as a financial institution wholly owned by the Government of China, thereby making the interest payments exempt from taxation under the amended provisions of the DTAA. The ITAT observed that the present appeal raised similar issues to those previously addressed and that no new arguments or evidence were provided to differentiate this case from the earlier ruling. As a result, the ITAT found no merit in the Revenue’s appeal and dismissed it, concluding that the earlier decision in favor of Tata Teleservices regarding the tax exemption applied directly to this case. The ruling was pronounced in open court on September 25, 2024.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This appeal is preferred by the Revenue against the order dated 30.10.2023 of the Commissioner of Income Tax (Appeals)-43, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.NFAC/2013-14/10209080 arising out of the appeal before it against the order dated 07.11.2022 passed u/s 201(1)/201(1A) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by ITO, International Taxation, Ward 3(1)(1), New Delhi (hereinafter referred to as the Ld. AO).
2. The issue involved in the appeal is if the CIT(A) was not justified to delete the addition made by AO where in AO had considered the interest payment made to China Development Bank (CDB) to be not exempt from taxation under Article 11(3) of India China DTAA. At the time of hearing, the AR submitted that the issue is no more res integra and the order dated 21/08/2024, of the Coordinate Bench in which one of us, i.e., Ld. Accountant Member was on the Bench, in ITA No.1393/Del/2023 for AY 2016-17 in assessee’s own case has been relied.
3. As we go through the grounds raised in the present appeal and those for AY 2016-17 (supra), we find that they are exactly the same. The Coordinate Bench has held that CDB is a financial institution wholly owned by the Government of China in view of the amended Article 11(3) of the India China DTAA, where CDB is specifically included.
4. Nothing was brought to our notice by the ld. DR to distinguish anything on facts or law.
5. Thus, we consider the issue to be squarely covered in favour of the assessee by order dated 21.08.2024 for AY 2016-17 (supra) and, accordingly, find no substance in the ground.
6. In the result, the appeal of Revenue is dismissed.
Order pronounced in the open court on 25.09.2024.
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