Consequently, the commissioner (appeals) upheld tax at 20% on curiosity earnings of about Rs 365 crore earned by it from Indian debt securities throughout FY19. As dividend earnings was exempt in the arms of shareholders, the dividend of practically Rs 700 crore was not a topic of dispute.
This led to ADIA submitting an enchantment with the Income Tax Appellate Tribunal. As a ‘govt’ physique it was entitled to tax exemption in India, below Article 24 of the India-UAE tax treaty. ITAT frowned on the actions of the decrease tax authorities and upheld the tax exemption.
Chartered accountants level out that a important number of non-residents, in the absence of a cellular number in India, have stuffed in this 10-digit numerical code to add their I-T return. This ITAT order may even assist different non-residents who’ve or might face tax calls for due to this fictitious cellular number entered by them.
In their order, the ITAT bench harassed that the tax treaty profit had been denied on a ‘very flimsy floor’. The cause given by the commissioner (appeals) is that the cellular number ‘9999999999’ was indicated by the Truecaller app to be a fraud number. On this foundation, the commissioner (appeals) surmised that ADIA is a fraud firm, somewhat it concluded that it isn’t a firm belonging to Abu Dhabi govt.
The ITAT bench identified, “Once all other details have been provided, and if that is doubted, then, he should have verified the PAN and the address provided in the return to see whether it is an Abu Dhabi govt-owned company. If he was incapable of verifying then, he should have asked the assessee (ADIA)… It is really surprising that the first appellate authority (aka appellate commissioner) will deny the status of govt-owned authority simply by looking up the mobile number in the Truecaller app. Such an approach is to be frowned upon and is liable to be rejected at the threshold.”
