TaxTMI 
TaxTMI 
2023 (6) TMI 1222
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.... assessee, i.e., respondent is a tax resident of Singapore. The assessee is registered as a Foreign Institutional Investor (FII) in debt segment with Securities and Exchange Board of India (SEBI). The assessee has been investing in debt securities in India during the year in consideration, which is A.Y.-2010-2011. The assessee filed its return of income on 30th September 2009 declaring total income of Rs. 33,99,75,350/-. In its return, the assessee declared a capital gain of Rs. 86,62,63,158/- on the sale of debt instruments and claimed exemption under Article 13(4) of India-Singapore Double Taxation Avoidance Agreement (DTAA). During the assessment, the assessee was asked to explain as to how the provisions of Article 24 of DTAA stood comp....
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....ngapore on his own. AO held that the assessee did not show that repatriation of the capital gains was made to Singapore and in view of Article 24 of DTAA, the assessee is not entitled to the exemption claimed. 3. Aggrieved by this treatment of capital gain as taxable in India in the draft assessment order, the assessee filed objections before the Dispute Resolution Panel (DRP). DRP by an order dated 14th November 2014 passed under Section 114C(5) of Act upheld the action of AO. Relying on the said order of DRP, AO passed the assessment order on 30th December 2014 under Section 143(3) read with Section 144C(13) of the Act. The assessment order dated 30th December 2014 was impugned by the assessee in an appeal filed before the ITAT-Mumbai. T....
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....be considered under Singapore tax law as accruing in or derived from Singapore, such income would be brought to tax in Singapore without reference to the amounts remitted or received in Singapore, the limitation as prescribed in Article 24 would not apply to the case at hand. 7. Mr. Pardiwalla also submitted relying on Direct Taxes Circular No. 789 dated 13th April 2000 and a judgment of Hon'ble Madras High Court in Commissioner of Income Tax Vs. Lakshmi Textile Exporters Ltd. 245 ITR 522 that the certificate issued by the Singapore authorities should constitute sufficient evidence for accepting the position of the law in Singapore and the AO should not try to interpret the laws of Singapore and in this regard a certificate, admittedly, is....
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....any property other than those mentioned In paragraphs 1, 2 and 3 of this Article shall be taxable only in that State." Since in this case, the property alienated are debt instruments, the assessee would come under Article 13(4) of DTAA, which says gains from alienation of any property (debt instrument in this case) shall be taxable only in Singapore, of which the alineator (the assessee) is a resident. Therefore, the entire capital gain of Rs. 82,58,83,330/- shall be taxed in Singapore. 10. Article 24 of DTAA reads as under: ARTICLE 24 LIMITATION OF RELIEF "1. Where this Agreement provides (with or without other conditions) that income from sources in a Contracting India State shall be exempt from tax, or taxed at a reduced rate III t....
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....ngapore where the laws in force in Singapore provides that the said income is subject to tax by reference to the amount which is remitted or received in Singapore. When under the laws in force in Singapore the income is subject to tax by reference to the full amount thereof, whether or not remitted to or received in Singapore, then in that case Article 24(1) would not apply. 12. The AO while framing the draft assessment order has disallowed the benefit of Article 13(4) of DTAA on capital gain earned in India holding that provisions of Article 24 of DTAA speaks about the restriction of exemption of such capital gain to the extent of repatriation of such income to Singapore. The AO has held that the assessee has not produced any evidence to ....