TRC-based treaty entitlement upheld for Mauritius entity where Revenue lacked independent evidence of non-residence and control abroad.

A Mauritius-incorporated entity with a valid Tax Residency Certificate and Global Business Licence was treated as entitled to India-Mauritius treaty relief for capital gains. The appellate finding accepted documentary evidence of Mauritius residence, including Mauritian directors and board meetings in Mauritius, and held that SEBI information relied on by the Revenue did not relate to the relevant year and could not displace that evidence on control, management or beneficial ownership. The proposed India-Mauritius protocol dated 07.03.2024 was not applied because it had not yet entered into force through notification by both contracting states. Settled TRC-based treaty entitlement principles were applied, and the Revenue's challenge failed.

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Issues: Whether the assessee, a Mauritius-incorporated entity holding a valid Tax Residency Certificate and Global Business Licence, was entitled to claim benefit of the India-Mauritius tax treaty for capital gains, notwithstanding the Revenue's allegation that its control and management and beneficial ownership were situated outside Mauritius.

Analysis: The assessee produced its Mauritius Tax Residency Certificate, Global Business Licence and SEBI registration, and the record showed that it continued investment activity in India. The adverse conclusion drawn in assessment rested mainly on information received from SEBI, but the appellate finding was that such information did not pertain to the year under consideration and therefore could not determine the assessee's control, management or beneficial ownership for the relevant period. The Revenue did not bring any independent material to dislodge the documentary evidence showing Mauritius residence, including the presence of Mauritian directors and board meetings held in Mauritius. The proposed India-Mauritius protocol of 07.03.2024 could not be applied because it had not yet entered into force through notification by both contracting states. The settled principles governing TRC-based treaty entitlement were applied to the facts.

Conclusion: The assessee was held entitled to India-Mauritius treaty benefits, and the Revenue's challenge to the appellate order failed.

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