The ITAT held that the assessee, a Luxembourg company, is...

The ITAT held that the assessee, a Luxembourg company, is entitled to India-Luxembourg tax treaty benefits. Despite being a subsidiary of Cayman Islands entities, the assessee proved its commercial substance in Luxembourg through valid tax residency certificate, filing tax returns, incurring operational expenses, and making investments beyond India. The revenue failed to establish the assessee was a mere conduit. Applying the Principal Purpose Test under MLI, obtaining treaty benefits cannot be considered the principal purpose when the assessee demonstrated economic activities and standalone existence. The ITAT directed granting treaty benefits to the assessee.