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2019 (1) TMI 1357 - AT - Income TaxDisallowance of relief claimed u/s 90 - tax paid in Thailand by its subsidiary, from whom assessee received dividend which was offered for taxation as per provisions of Indian I.T. Act - Assessee is an Indian company and has 100% holding in its subsidiary, situated in Thailand - ‘tax sparing credit’ - Taxability of dividend income under Thailand Revenue Code - DTAA between India and Thailand - Held that:- From co-joint reading of taxability of dividend income under Thailand Revenue Code, which has been exempted as per Investment Promotion Act, it is clear that exemption is available to assessee on dividend received from its subsidiary in Thailand, which would have been otherwise taxable as per Thailand Revenue Code @ 10%. Meaning thereby, assessee was not liable to pay any tax in Thailand by virtue of exemption granted as per Investment Promotion Act, and therefore assessee would be entitled to credit of such taxes deemed to have been payable in Thailand under article 23 (3) of DTAA between India and Thailand. From records placed before us, it is noted that assessee has sought credit at 10% on dividend received by it from its Thailand subsidiary, which is the tax that would have been otherwise payable by assessee in Thailand as per section 70bis of Thailand Revenue Code. The tax paid by assessee on dividend income in India is at 30%, which is more than tax payable in Thailand and therefore, we do not find any violation of requirements of Paragraph 2 of Article 23 of DTAA between India and Thailand. - Decided in favour of assessee.
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