Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 95 - AT - Income TaxDenial of Foreign tax credit - as per DR where there was company has dual residency, the benefit of Treaty be available. He further submitted that Ld.DRP has given a finding that the assessee could not prove the place of effective management - assessee vehemently argued that the assessee company is a foreign company domiciled in USA and accordingly, its income is taxable in USA as per the US laws - HELD THAT:- We find merit in contention that if the assessee is a company treated as non-resident by the AO then no income sourced outside India would liable to be taxed in India in purview of section 4, section 5 and section 9 of the Income Tax Act. Ld. Counsel for the assessee took us through various clauses of the Treaty under the provision of India US DTAA. It is the say of the assessee that even Notification/Circular issued by CBDT dated 22.06.2018 i.e. Notification 29/2018 the benefit would be available to the assessee. We are unable to affirm the view of Ld.DRP that no foreign tax credit can be granted to the assessee. It is not disputed that the same income has been offered in USA and suffered tax thereon. Therefore, an income that has already suffered tax, if the same suffers tax in other countries that would amount to double taxation which is not the intent of law. If the finding of lower authority regarding place of effective management is presumed to be correct, in that case, no tax could be charged as the transaction took place off shores and income was generated in USA. Therefore, considering the totality of the facts, we hereby direct the AO to allow foreign tax credit to the assessee. Grounds raised by the assessee are hence, allowed.
|