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2024 (1) TMI 944 - AT - Income TaxRefund of excess Dividend Distribution Tax (DDT) paid - Rate of tax payable on DDT, will be as per section 115-O or as per rates mentioned in DTAA - Distribution of dividends to its share holders (Germany) (Non-residents) and paid DDT on distribution of dividends u/s 115-O - assessee is engaged in the business of sales and distribution of headphones, microphones, monitoring systems, tour guide systems and aviation headsets. It imports goods from Sennheiser group companies for reselling through its distributors in India - HELD THAT:- We find that this issue is no longer res integra in view of the recent Special Bench decision of Mumbai Tribunal in the case of DCIT Vs. Total Oil India Private Limited [2023 (4) TMI 988 - ITAT MUMBAI (SB)] where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income-tax (Tax on Distributed Profits) referred to in sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in section 115-O of the Act and not at the rate of tax applicable to the non-resident shareholders(s) as specified in the relevant DTAA with reference to such dividend income. Nevertheless, we are conscious of the sovereign's prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAS. Thus, wherever the Contracting States to a tax treaty intend to extend the treaty protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any - Decided against assessee.
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