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2014 (2) TMI 508 - AT - Income TaxTaxability of capital gain – Sale of mutual fund units – DTAA between India and Switzerland – Scope of Article 13(6) of the tax treaty - Held that:- Even though the section 32(3) had created the fiction to make the UTI a deemed company and distribution of income received by the unit holder a deemed dividend, the deeming provision had to be applied for the purpose for which it had been specifically created – Relying upon Apollo Tyres Ltd. Versus Commissioner of Income Tax [2002 (5) TMI 5 - SUPREME Court] It was confined only to deeming UTI a company and deeming the income from units as dividend - There were no specific provisions for deeming the units as shares - units of UTI are not shares of companies - in the absence of any specific provision under the Act to deem the unit as shares, it could not be considered as shares of companies and, therefore, the provisions of Article 13 (5) (b) cannot be applied in case of units – the order of the CIT(A) upheld that provisions of Article 13(6) are applicable in case of units as per which the capital gain cannot be taxed in India – Decided against Revenue.
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