Case Number: ITA 784/DEL/2020
Appellant: Amadoroco Limited, Nicosai Cyprus
Respondent: ACIT, International Taxation 1(1)(1), New Delhi
Assessment Year: 2016-17
Result: Appeal allowed
Case Filed on: 2020-02-13
Order Type: Final Tribunal Order
Date of Order: 2023-03-02
Pronounced on: 2023-03-02
Amadoroco Limited, a company registered and operating under the laws of Cyprus, challenged the assessment order by India’s tax authority which denied them benefits under the India-Cyprus Double Tax Avoidance Agreement (DTAA). The primary contention involved the status of the company as the ‘beneficial owner’ of interest income derived from investments in India.
The appellant argued that the assessment order was beyond the statutory deadline and that they were improperly denied benefits under the DTAA. Specifically, they contended they were the beneficial owners of the interest income, contrary to the tax authority’s position that labeled them as a ‘conduit’ entity.
The tribunal recognized procedural flaws in the assessment process and agreed with the appellant on several key points, including the misapplication of the term ‘beneficial owner’ by the tax authorities. The tribunal’s decision focused on the literal interpretation of the relevant DTAA provisions and prior judicial precedents which support the appellant’s claims of substantial commercial presence and business purpose in Cyprus.
Order Pronounced in the Open Court on 02/03/2023
Members:
Assistant Registrar: Binita
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