Case Law Details
CIT Vs Zaheer Mauritius (Delhi High Court)
The recent decision by the Delhi High Court on the taxation of Compulsorily Convertible Debentures (CCDs) under the India-Mauritius Double Taxation Avoidance Agreement (DTAA) marks a significant development. The court’s closure of appeals emphasizes adherence to the Supreme Court’s final decision and brings clarity to an ongoing dispute.
Detailed Analysis: The case, CIT vs Zaheer Mauritius, involves appeals for the Assessment Years 2014-15 and 2013-14. The appellant, seeking to challenge Tribunal orders, aimed to contest the taxation of gains arising from the transfer of CCDs. The dispute arose from the interpretation of Article 13 of the India-Mauritius DTAA.
The Authority for Advance Ruling (AAR) had initially ruled against the respondent/assessee, treating the gains as interest. However, a subsequent writ petition (W.P.(C) 1648/2013) led to the AAR’s ruling being set aside by the Delhi High Court on July 30, 2014.
The Tribunal, considering the High Court’s judgment, ruled in favor of the respondent/assessee, asserting that the gains from CCD transfer were capital gains and not taxable under the DTAA.
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