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TMI Blog2004 (10) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Avoidance Agreement with U.A.E. As per Article 13(3) of the Double Taxation Avoidance Agreement between India and U.A.E., signed in 1993 gains from alienation of shares in an Indian company held by resident of U.A.E. will be taxable only in U.A.E. So as our client is a resident of U.A.E. for which necessary Tax residency certificate is enclosed. Hence under this tax treaty the assessee would not be liable to capital gain tax in India . • If there is no relief available then whether the assessee can avails the benefits of Ist proviso to section 48 along with section 112. • Otherwise after calculating long term capital gain as per first proviso to Sec. 48. Whether the assessee can avail the benefit of the lower tax rate of 10% as per f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaty it is not taxed in India, it will lead to a situation of double non-taxation. It is, therefore, pleaded that the applicant be taxed in India under the Act. 3. The applicant is not present either in person or through any representative. Indeed the applicant was informed by the secretariat of this Authority that he has a right to be heard before pronouncement of the ruling, if he so desires. The notice was issued to him on 21st September, 2004. 4. Heard Mr. Sunil Agarwal, Addl. DIT who appears for the Commissioner. 5. From the perusal of the questions noted above, it is evident that question no. (1) is the main question and question nos. (2) & (3) are consequential. It would be necessary to refer to article 13 of the Treaty which runs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from alienation of such property are made taxable only in the Contracting State of which the alienator is a resident. 6. From the facts narrated above, it is clear that under the Treaty the capital gains arising from alienation of the shares in Indian companies to the applicant who is a resident of UAE are taxable only in UAE. Under the Act, it cannot be disputed the capital gains arising to a non-resident in India, are taxable in India. Having regard to section 90(2) of the Act, the terms of the Treaty have overriding effect over the provisions of the Act in the event of there being conflict between the Treaty and the Act. [(Union of India v. Azadi Bachao Andolan (SC) - 263 ITR 706 and P.V.A.L. Kulandagan Chettiar - 267 ITR 654 (SC)] It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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