LEAPFROG FINANCIAL INCLUSION INDIA (II) LTD,MAURITIUS vs. ACIT, CIRCLE 2(2)(1), INTERNATIONAL TAXATION, NEW DELHI

ITA 366/DEL/2023Status: DisposedITAT Delhi11 August 2023AY 2020-2119 pages
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What did the Tribunal hold?

The Tribunal held that the assessee, holding a valid Tax Residency Certificate (TRC), is entitled to treaty benefits. The Assessing Officer's allegations of the assessee being a shell company were not supported by cogent evidence. The DRP's application of Article 27A was also found to be a misinterpretation as the assessee's investments predated the relevant treaty provisions.

What were the facts?

The assessee, a Mauritius-based company, claimed exemption on capital gains from selling shares under the India-Mauritius DTAA. The Assessing Officer denied the benefit, viewing the company as a shell entity lacking commercial substance and set up for tax avoidance. The DRP upheld this, citing the Limitation of Benefit clause.

What were the issues?

Whether the assessee is entitled to treaty benefits under the India-Mauritius DTAA for capital gains on shares, and if the GAAR provisions are applicable given the investment dates.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 90,Section 95,Section 96,Section 144BA

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IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. G. S. PANNU, PRESIDENT AND SH. SAKTIJIT DEY, VICE-PRESIDENT (Assessment Years : 2019-20 & 2020-21)

(Assessment Year : 2020-21) Circle – 2(2)(1) 2nd Floor, C/o Axis New Delhi Fiduciary Ltd., The Axis 26 Cybercity, Ebene, Mauritius - 72201 PAN No. AACCL 8541 Q (APPELLANT) (RESPONDENT) Assessee by Shri Deepak Chopra, Adv. Shri Anmol Anand, Adv. Ms. Priya Tandon, Adv. Revenue by Shri Vizay B. Vasanta, CIT-D.R. Date of hearing: 15.05.2023 Date of Pronouncement: 11.08.2023

PER SAKTIJIT DEY, VICE-PRESIDENT :

Captioned appeals have been filed by the assessee challenging the final assessment orders passed u/s 143(3) read with Section 144C(13) of the Income-tax Act, 1961 pertaining to Assessment Years 2019-20 & 2020-21, in pursuance to the directions of Learned

2.

The common issue arising for consideration in these appeals is whether the assessee i

The order continues below.

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