Case Law Details
DCIT Vs Credit Suisse (Singapore) Ltd. (ITAT Mumbai)
The assessee conducts portfolio investments in Indian securities in its capacity as SEBI registered FII/FPI, conclusion of the learned CIT(A) that the offshore distribution commission income is in th nature of ‘business income’ of the assessee does not require any interference.
Facts- The assessee is a company incorporated in Singapore under the Singapore Companies Act. The assessee is a tax resident of Singapore and accordingly, is entitled to the beneficial provisions of India Singapore DTAA’. The assessee is registered as FII with SEBI and conducts portfolio investments in Indian securities in its capacity as SEBI registered FII/FPI.
For AY 2014–15, the assessee filed its ROI declaring a total income of Rs. 26,05,54,889. The assessee and HDFC Asset Management Co Ltd had entered into an Offshore Distribution Agreement to which the assessee agreed to distribute Mutual Fund schemes launched by HDFC Asset Management Co Ltd, with a view to procuring subscriptions for such schemes from investors outside India.
During the year under consideration, the assessee, inter-alia, earned Offshore Distribution Commission Income of Rs. 16,38,81,445 from HDFC Asset Management Co Ltd, which was claimed as exempt under Article 12 of DTAA. During the course of assessment proceedings, the assessee was asked to give justification for exemption claimed under the provisions of DTAA.
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