Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 151 - AT - Income TaxBenefits of India UAE Double Taxation Avoidance Agreement - assessee had taken vessels on the time charter, for transportation of good by ship in the international traffic, as also the assessee’s filing of the commercial licence issued by the Department of Economic Development, Government of Dubai, and tax residency certificate - HELD THAT:- On the facts of the present case, the inferences drawn by the authorities below are unsustainable in law, as there is reasonable material on record to substantiate the stand of the assessee that the assessee company was incorporated in UAE, and was managed and controlled wholly in the UAE. In the present case, there is nothing to even suggest that the business activities of the assessee company were not bonafide. There is reasonable evidence before us, and was all along available before the authorities below, that the assessee was having bonafide business in the UAE, and, as such, the lack of bonafides could not be inferred. Once assessee submits reasonable evidence, including the evidence in support of the existence of an office, and dedicated employees, in UAE and the business being carried on from there- as also the financial statements showing the business being carried on from the UAE on a regular and commercial basis, unless the revenue authorities bring on record some material to dispute this position, one cannot proceed to conclude, as the Assessing Officer did, that the business activities of the assessee lacked bonafides. The authorities below were thus clearly in error in holding that the LOB clause was applicable on the facts of this case. We are of the considered opinion that the assessee company is a resident of the UAE, in terms of requirements of article 4(1)(b) of the Indo-UAE tax treaty, that the limitation of benefits provisions of article 29 of the Indo-UAE tax treaty cannot be pressed into service in this case, and that the assessee is eligible for treaty protection, in respect of its income earned in India, under the Indo UAE tax treaty. It is not even in dispute, and rightly so, that under the provisions of article 8(1) of the Indo UAE tax treaty, which provides that “profits derived by an enterprise of a Contracting State from the operation by that enterprise of ships in international traffic shall be taxable only in that State”, the assessee company is protected from taxation of the income in question in India. AO will give relief accordingly.
|