Case Law Details
Kismet Exports & Investments Pvt. Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that payment towards buy-back of shares to an NRI doesn’t attract deduction of tax under section 195 as according to Indo-Singapore DTAA jurisdiction for taxing the capital gains arising in the hands of an NRI is in Singapore and not in India
Facts-
The assessee bought back shares from non-residential shareholder, Mr. Dileep Raghu Nath, who was a resident of Singapore, and as per the double taxation avoidance agreement (DTAA) between India and Singapore, Article 13 specifically provides that capital gains arising to a resident of Singapore are subject to tax in Singapore and not in India. Ld. AO rejected the claim of assessee. The addition was made for non-deduction of TDS against payment made to non-resident shareholders on account of buy back of shares by contravening section 195 read with section 40(a)(ia) of the Act and added back Rs.15,34,68,000/-with the total income of the assessee. The assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the AO.
Conclusion-
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