DCIT (IT) 2(2)(2), MUMBAI vs. HSBC BANK (MAURITIUS) LTD, MUMBAI

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ITA 1319/MUM/2019Status: DisposedITAT Mumbai20 March 2020AY 2014-1510 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Tax Residency Certificate issued by Mauritian authorities, as clarified by CBDT Circular 789, is sufficient evidence to establish beneficial ownership of interest income. The Tribunal also noted that a coordinate bench had previously ruled in favor of the assessee on similar issues.

What were the facts?

The Revenue appealed against the CIT(A)'s order directing the Assessing Officer to follow a previous ITAT decision regarding interest income from foreign currency loans. The Revenue argued that the assessee failed to prove beneficial ownership and that the ITAT's reliance on CBDT Circular 789 was misplaced for interest income.

What were the issues?

Whether the Tax Residency Certificate is sufficient to establish beneficial ownership of interest income under the India-Mauritius DTAA, and if CBDT Circular 789 is applicable to interest income.

Which sections of the Income-tax Act were involved?

Article 11(3)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, मुंबई पीठ “आई ”

Before: SHRI VIKAS AWASTHY & SHRI N.K.PRADHAN

Hearing: 16/03/2020Pronounced: 20/03/2020
5.

From the perusal of the above order of the Tribunal, it is evident that the Tribunal has considered the issue of assessee being beneficial ownership of the interest income. The Co-ordinate Bench in an unequivocal manner has held that the assessee is a ‘beneficial owner’ of the interest income. Undisputedly, the nature of interest income in assessment year under appeal is no different preceding assessment years. Ergo, we do not concur with the argument of ld. Departmental Representative that the Tribunal has not considered the fact in the past that the interest is not beneficially owned by the assessee. In the light of decision of the Co-ordinate Bench on the issue raised in the appeal by Revenue , we find no infirmity in the impugned order. The CIT(A) has granted relief to the assessee by following the order of Tribunal in (supra). The impugned order is upheld and the appeal by the Revenue is dismissed sans merit.

6.

In the result, the appeal by the Revenue is dismissed.

Order pronounced in the open court on Friday the 20th day of March, 2020.

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