FOSROC CHEMICALS (INDIA) PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), BANGALORE

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ITA 968/BANG/2022Status: DisposedITAT Bangalore30 November 2022AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer (AO) with a direction to follow the decision of the Special Bench on this matter. The AO is to decide the case based on the future Special Bench ruling.

What were the facts?

The assessee claimed that Dividend Distribution Tax (DDT) should be restricted to 10% as per the Indo-UK DTAA, instead of the effective rate of 20.36% under Section 115-O of the Act. This claim was based on a prior tribunal ruling.

What were the issues?

Whether Dividend Distribution Tax should be restricted as per the DTAA rate when it is higher than the rate prescribed in the Act. The applicability of DTAA provisions to DDT.

Which sections of the Income-tax Act were involved?

Section 115-O

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Income Tax Appellate Tribunal, BANGALORE BENCHES “A”, BANGALORE

Before: Shri George George K, JM & Shri Laxmi Prasad Sahu, AM

Hearing: 30.11.2022Pronounced: 30.11.2022

O R D E R

Per George George K, JM :

1.

This appeal at the instance of the assessee is directed against CIT(A)’s order dated 03.08.2022. The relevant assessment year is 2018-2019.

2.

The assessee has raised six grounds in its memorandum of appeal. However, during the course of hearing, the learned AR did not press ground Nos.1 to 5. The surviving ground, namely, ground No.6 reads as follow:-

“6. That the learned lower authorities ought to have restricted the Dividend Distribution tax at 10% as per the Indo- UK DTAA against the effective rate at 20.36% u/s 115-O of the Act.”

. M/s.Fosroc Chemicals (India) Private Limited.

3.

The above ground relates to the claim of the assessee that dividend distribution tax should be confined to the rate as per DTAA for dividend distributed to non-resident assessee. The learned AR submitted that the assessee has raised the above ground on the basis of the order rendered by the Delhi Bench of the Tribunal in the case of Giesecke & Devrient (India) (P) Ltd. v. Addl.CIT reported in (2020) 120 Taxman.com 338 (Delhi-Tribunal). However, the learned AR fairly submitted that this issue has been referred to the Special Bench and accordingly pleaded that this claim of the assessee may be restored to the A.O. with the direction to follow the decision that may be rendered by the Special Bench in future.

4.

We have heard rival submissions and perused the material on record. Having regard to the submission made by the learned AR, we restore this issue to the files of the A.O. with the direction to follow the decision that may be rendered by the Special Bench of the Tribunal on this issue, in due course. It is ordered accordingly.

5.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced on this 30th day of November, 2022.

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