“treaty benefits”

International TaxSection 90Section 90229 judgments

The decision most relied on for treaty benefits is Union of India v. Azadi Bachao Andolan (263 ITR 706), cited in 691 judgments on BharatTax.

Leading authorities on treaty benefits

Union of India v. Azadi Bachao Andolan

263 ITR 706 · 2003 · Supreme Court

691

citing judgments

A citizen is free to carry on business within the law, and mere tax planning without a motive to evade taxes through colorable devices is not frowned upon. The liability to taxation, for the purpose of tax treaty application, is a legal situation, not the fiscal fact of actual payment.

India Vs. Azadi Bachao Andolan 263 ITR 706 (SC); and Vodafone International Holdings B.V v. Union of India

341 ITR 1 · 2012 · Supreme Court

295

citing judgments

Legitimate tax planning is permissible, allowing taxpayers to arrange their affairs to minimize tax liabilities while respecting the "look at test" for transaction genuineness and the separate entity principle in corporate taxation. The source of funds for treaty-beneficial structures does not automatically invalidate the transaction.

(i) Formula One World Championship Ltd. v. CIT

394 ITR 80 · 2017 · Supreme Court

200

citing judgments

This case provides foundational principles that illuminate the contours of the concept of 'Permanent Establishment' (PE) under tax treaties, especially regarding a 'fixed place' PE.

DIT v. Guy Carpenter & Co Ltd.

346 ITR 504 · 2012 · High Court

171

citing judgments

For fees for technical services to be taxable under a tax treaty's 'make available' clause, a transfer of technology enabling the recipient to independently perform the service in the future is necessary, beyond mere service rendition. The case also clarifies that re-insurance services do not constitute 'imparting' of information taxable as royalty.

CIT v. P.V.A.L. Kulandagan Chettiar

267 ITR 654 · 2004 · Supreme Court

citing judgments

This case established a principle regarding the application of Double Taxation Avoidance Agreements (DTAAs) versus domestic tax law, particularly concerning the use of more beneficial provisions for an assessee, though its specific impact has been nullified by subsequent legal amendments.

(5)) 3.12. DCIT v. Patni Computer Systems Ltd.

114 ITD 159 · 2008 · ITAT

citing judgments

An assessee has the option to choose between the provisions of the Income-tax Act and a Double Taxation Avoidance Agreement (DTAA) in any given year, and the non-election of DTAA benefits in one year does not prevent claiming them in subsequent years.

Sanofi Pasteur Holding SA v. Department of Revenue

354 ITR 316 · 2013 · High Court

citing judgments

Gains from the indirect transfer of shares in a foreign company holding Indian shares are not taxable in India under the relevant tax treaty, which is considered a self-contained code to be interpreted plainly. Creating corporate structures or special purpose vehicles for investment to secure tax benefits is a legitimate business activity.

Invensys Systems Inc. v. DIT

323 ITR 184 · 2010 · Reported

citing judgments

Payments for services are not taxable as fees for technical services (FTS) under a Double Taxation Avoidance Agreement (DTAA) if the services do not 'make available' any technical knowledge, know-how, or expertise to the recipient in India.

Judgments citing treaty benefits

Sabre Decision Technologies International Llc, New Delhi vs. ACIT, International Taxation, Circle 3(1)(2), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 5782/DEL/2017[2014-15]Status: DisposedITAT Delhi03 Jan 2023AY 2014-15

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR

Section 234ASection 44DSection 9Section 9(1)(vi)

however been submitted by the assessee that the Tax Residency Certificate of the US is not available with the company and therefore treaty benefits under the DTAA are not available to the assessee. The interpretation of PE in the case of the assessee, therefore, has to be determined only ... advice. Moreover the above cases have been decided on the basis of interpretations of the Indo-US Tax Treaty not the domestic law. The treaty benefit is not available to the assessee. 4.4.10 Further, the assessee quoted the case of Qualcomm India Private Limited v. ADIT

DCIT Intl Tax Cir-4(3) (2) (1), Mumbai vs. M/S. Win on Shipping, Mumbai

Appeal are dismissed

ITA 2079/MUM/2021[2015-16]Status: DisposedITAT Mumbai26 Oct 2022AY 2015-16

For Appellant: Shri Sandeep Bhalla/For Respondent: Shri Somendu Kumar Dash

Section 143(3)Section 144C(3)Section 90(4)

availably of TRC covering the entire period of 12 months of the relevant previous year, the Assessing Officer denied the Tax Treaty benefit and brought to tax entire shipping freight income in India. Ld. Authorised Representative for the Assessee submitted that the Assessee was operational since its formation ... proceedings. The limited contention of the Revenue is that the Assessee did not hold a valid TRC and therefore, could not be granted Tax Treaty benefit. In this regard, the Learned Departmental Representative placed reliance on the provisions of Section 90(4) of the Act which reads as under: ―Section

ACIT (It) 3(1) (1), Mumbai vs. M/S. J.P.Morgan Indian Investment Company Mauritius Ltd, Mumbai

In the result, the CO filed by the assessee is allowed and appeal filed by the revenue becomes infructuous as dismissed

ITA 2382/MUM/2021[2016-17]Status: DisposedITAT Mumbai27 Sept 2022AY 2016-17

Bench: Shri Amit Shukla, Jm & Shri Amarjit Singh, Am आयकरअपीलसं./ I.T.A. No. 2382/Mum/2021 (ननधधारणवर्ा / Assessment Year: 2016-17) Acit-3(1)(1), M/S J. P. Morgan India R. No. 1628, 16Th Floor, Air Investment Company India Building, Nariman Mauritius Limited, बनाम/ Point, Mumbai-400 021 C/O- Srb & Associates Llp, Vs. 14Th Floor, The Ruby 29 Senapati Bapat Marg, Dadar (W), Mumbai-400 028 स्थधयीलेखधसं./जीआइआरसं./ Pan No. Aaacf0626J (अपीलधथी/Appellant) (प्रत्यथी / Respondent) : & Cross Objection No. 41/Mum/2022 (ननधधारणवर्ा / Assessment Year: 2016-17) M/S J. P. Morgan India Acit-3(1)(1), Investment Company R. No. 1628, 16Th Floor, Air India Mauritius Limited, Building, Nariman Point, बनाम/ C/O- Srb & Associates Mumbai-400 021 Vs. Llp, 14Th Floor, The Ruby 29 Senapati Bapat Marg, Dadar (W), Mumbai-400 028 (अपीलधथी/Appellant) (प्रत्यथी / Respondent) : अपीलधथीकीओरसे/ Appellant By : Shri Milind Chavan, Ld. Dr प्रत्यथीकीओरसे/Respondent By : Shri Anish Thacker, Ld. Ar सुनवधईकीतधरीख/ : 18.05.2022 & 23.09.2022 Date Of Hearing घोर्णधकीतधरीख / : 27.09.2022 Date Of Pronouncement

For Appellant: Shri Milind Chavan, Ld. DRFor Respondent: Shri Anish Thacker, Ld. AR

Section 10(38)Section 143(3)Section 144C

treaty can result in the entire (gross) income being not subject to tax in India in a year where a taxpayer claims treaty benefits. Therefore, in a year in which a taxpayer claims benefit of Article 13(4) of the India- Mauritius tax treaty, the entire gains he earns will ... extent of inconsistency with the terms of the DTAC." 23. There could however be years where a taxpayer chooses not to claim treaty benefit as we have already noted above that he can do so under the provisions of Section 90(2) of the Act. When he does

Blackstone Fp Capital Partners Mauritius V Ltd., Mauritius vs. Dy CIT (International Taxation) Circle-1(2)(2), Mumbai

In the result, the appeals are allowed for statistical purposes in the terms indicated above

ITA 981/MUM/2021[2016-17]Status: FixedITAT Mumbai17 May 2022AY 2016-17

Section 143(3)Section 154

however missing in article 13. It would appear to us that the concept of beneficial ownership being a sine qua non to entitlement to treaty benefits cannot, in the absence of specific provision to that effect, cannot be inferred or assumed. As a look at the international tax literature shows

Blackstone Fp Capital Partners Mauritius V Ltd., Mauritius vs. DCIT Intl Tax Cir.1(2), Mumbai

In the result, the appeals are allowed for statistical purposes in the terms indicated above

ITA 1725/MUM/2021[2016-17]Status: FixedITAT Mumbai17 May 2022AY 2016-17

Section 143(3)Section 154

Lemnisk Private Limited (Formerly Known As 'Vizury Interactive Solutions Private Limited'), Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result appeal filed by assessee for assessment year

ITA 2129/BANG/2018[2013-14]Status: DisposedITAT Bangalore29 Apr 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K.R. Vasudevan

basic principle enunciated by Hon’able Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd.(supra), that domestic law cannot override the treaty benefits, cannot be ignored. 17. We therefore remand this issue back to the Ld.AO for de novo verification, in order to correctly characterise the nature ... payment made by the assessee to various vendors. It may also be noted that, treaty benefits available to assessee cannot be done away with, in case it the circumstances so warrant. Accordingly Ground No.1 for assessment 2012-13 and Ground No.2 for assessment year 2013-14 stands allowed for statistical

Lemnisk Private Limited (Formerly Known As 'Vizury Interactive Solutions Pvt Ltd'), Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result appeal filed by assessee for assessment year

ITA 1851/BANG/2017[2012-13]Status: DisposedITAT Bangalore29 Apr 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K.R. Vasudevan

Silver Bella Holdings Ltd., Mumbai vs. ACIT, Circle- 3(1)(2), International Taxation, New Delhi

ITA 7397/DEL/2018[2014-15]Status: DisposedITAT Delhi19 May 2021AY 2014-15

Bench: Shri N.K. Billaiya & Sh. Amit Shukla[Assessment Year: 2014-15]

Section 115A(1)(a)Section 143(3)Section 144C(1)Section 144C(13)Section 153

from which income in question has been derived or motivated by sound business principals/reasons and they do not have a primary purpose of obtaining treaty benefits. The assessee filed necessary details with detailed submissions. After considering the details and the submission, the Assessing Officer issued a show cause asking ... assessee why the treaty benefit should not be disallowed. The assessee filed detailed reply in support of its claim of treaty benefit. The replies of the assessee do not find favour with the Assessing Officer who disallowed the treaty benefit and assessed the income @20%. 4. The assessee raised objections

Betoking Ltd, Cyprus vs. ACIT, Circle-1(1)(2) (International Taxation), New Delhi

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 7717/DEL/2019[2016-17]Status: DisposedITAT Delhi02 Mar 2021AY 2016-17

Bench: Shri O.P. Kant & Shri K.N. Chary[Through Video Conferencing]

Section 11(2)Section 143(3)Section 246A

facts and in the circumstances of the case and in law, the learned CIT(A) has erred in holding that the legal precedents wherein treaty benefits have been granted basis Tax Residency Certificate (‘TRC’) are not applicable to the Appellant’s case. 5 That on the facts