In the Income Tax Appellate Tribunal of Delhi, the case ITA No. 1915/DEL/2022 was presented, involving THR Infrastructure Pte Ltd, headquartered in Gurgaon, and the Deputy Commissioner of Income Tax, Circle-3(1)(1), International Taxation, New Delhi. The core issue revolved around the denial of capital gains tax exemption claimed under the Double Taxation Avoidance Agreement (DTAA) between India and Singapore. The appellant, THR Infrastructure, contended that the assessment order passed by the DCIT and the directions by the Dispute Resolution Panel-2 were erroneous.
The tribunal heard extensive arguments concerning the applicability of the DTAA, specifically the benefits denied due to alleged treaty shopping and the lack of substantial economic presence in Singapore by THR Infrastructure. The case highlighted complex issues of cross-border taxation, treaty interpretation, and the impact of corporate structure on tax obligations.
After careful deliberation, the tribunal’s decision provided clarity on the interpretation of DTAAs, particularly concerning the substance over form doctrine and the criteria for availing treaty benefits. This case serves as a significant precedent for understanding the tax treatment of international financial instruments and the requirements for a valid claim under DTAAs.
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