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2021 (3) TMI 204 - AAR - Income TaxAdvance ruling - tax liability u/s 115-O - application of beneficial provision of India-Singapore DTAA in respect of DDT on dividend paid/payable to non-resident shareholder - transaction was designed prima-facie for avoidance of tax - whether the Dividend distribution tax (‘DDT’) paid/payable by Comstar Automotive Technologies Private Limited (Comstar or the Applicant or the Company) under the provisions of Section 115-O on dividend paid/payable to Singapore VII Topco III Pte. Ltd. ('Singapore Topco') and Comstar Mauritius Limited ('Comstar Mauritius') is in substance and effect, a tax on dividends? - Whether Applicant, being a resident of India, is entitled to apply the lower tax rate of 10% provided under Article 10 of India-Singapore DTAA' and 5% under Article 10 of India-Mauritius DTAA' in respect of DDT payable on dividend paid to Singapore Topco and Comstar Mauritius respectively under Section 115- O of the Act? - HELD THAT:- We do not find any design to avoid tax by any illegal or improper means. The objection of the Department is found to be rather on merits of the questions raised in the present application. An Identical issue was considered by us in the case of Signify Innovations India Private Limited [2021 (2) TMI 1062 - AUTHORITY FOR ADVANCE RULINGS, NEW DELHI] wherein it has been held that, if the applicant has raised question to avail treaty benefit in respect of its tax liability u/s 115-O of the Act. it cannot be considered as a transaction designed for avoidance of tax. Following that ruling the application is admitted u/s 245 R (2) of the Act The date of next hearing will be intimated in due course.
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