SAKET KANOI,GURGAON vs. DCIT INTL. TAXATION, GURGAON

ITA 3243/DEL/2023Status: DisposedITAT Delhi23 October 2024AY 2021-22Bench: Dr. B. R. R. Kumar, Accountant Member, Sh. Yogesh Kumar US (Judicial Member)48 pages
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What did the Tribunal hold?

The Tribunal held that actual payment of tax in the UAE is not a prerequisite for claiming treaty benefits. The right of the UAE to tax, even if not exercised, is sufficient to invoke the DTAA, following the principle laid down in the Azadi Bachao Andolan case.

What were the facts?

The assessee claimed exemption on capital gains from the sale of debt mutual funds, relying on the India-UAE DTAA. The Assessing Officer (AO) and Dispute Resolution Panel (DRP) denied this benefit, arguing the assessee was not liable to tax in the UAE and thus not covered by the treaty.

What were the issues?

Whether the benefit of the India-UAE DTAA can be claimed by an individual who is not actually liable to pay tax in the UAE, but has fiscal domicile there? Whether the existence of double taxation is a necessary condition to invoke the DTAA?

Which sections of the Income-tax Act were involved?

Section 90

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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: Dr. B. R. R. Kumar, Sh. Yogesh Kumar US

For Appellant: CA Sh. Rajesh Sanghwi, CA
Hearing: 14.08.2024Pronounced: 23.10.2024

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order dated 29.09.2023 passed by the AO u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961. 2. Following grounds have been raised by the assessee:

“1. In the facts and circumstances of the case and in law, the Ld. Assessing Officer (AO) and consequently the Dispute Resolution Panel (DRP) have grossly erred by denying the appellant, the benefit of Article 13(5) and any other benefits under the India-UAE DTAA on capital gains on sale of debt mutual funds of Rs. 1,54,01,166/-, on the premise that an individual (the appellant herein) i

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