AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1579
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....o prefer an appeal against the order dated 24 January 2025 passed by the Assistant Commissioner of Income-tax (International taxation) - Circle 2(3)(2), Mumbai (hereinafter referred to as the "Ld. AO') under section 144C(13) read with section 147 of the Income-tax Act, 1961 ('the Act'), in pursuance of the directions issued by the Hon'ble Dispute Resolution Panel - 1, Mumbai (hereinafter referred to as the 'Ld. DRP') on the following grounds, each of which are without prejudice to and independent of the others: 1. Ground No. 1 - Assessment order is barred by limitation On the facts and in the circumstances of the case, the final assessment order dated 24 January 2025 passed by the Assessing officer under section 147 r.w.s. 144C(13) of the Act having been passed beyond the limitation provided in terms of section 153 of the Act, is illegal, being barred by limitation, and is therefore, void-ab-initio and liable to be quashed. 2. Ground No. 2 - Validity of Reassessment proceedings On the facts and circumstances of the case and in law, the Ld. DRP erred in confirming the action of the Assessing officer in initiating and conduc....
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....e of the Appellant (being a determinate trust settled by ADIA) is taxable in the hands of Trustee in like manner as ADIA Without prejudice to above, assuming without admitting that the entire income of INR 5,58,71,311 is taxable in the hands of Equity Trust (Jersey) Limited ('ETJL' or "Trustee') i.e., the trustee of the GMT, the Ld. AO failed to appreciate that: a) by virtue of the provisions of inter alia section 161(1) of the Act, as a representative assessee of ADIA, tax can be levied on the Trustee (ETJL) in the like manner and to the same extent as would have been leviable upon and recoverable from ADIA; b) accordingly, by virtue of the provisions of section 161 r.w. section 164 of the Act r.w. Article 24 of India UAE Tax Treaty no tax is leviable in hands of ETJL; 7. Ground No. 7: Not granting credit of tax deducted at source of Rs. 91,43,123 On facts and in the circumstances of the case and in law, the Ld. AO erred in not granting the credit of tax deducted at source amounting to Rs. 91,43,123 in relation to the corresponding income of INR 5,58,71,311 which the Ld. AO sought to be taxed. 8. Ground No. 8: Applying incor....
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.... of the India- UAE Double Taxation Avoidance Agreement ("DTAA") and for the assessment years 2016-17 to 2018-19 similar income was brought to tax, show cause notice dated 23/03/2023 was issued to the assessee under section 148A(b) of the Act. After considering the response of the assessee and necessary approval from the competent authority, an order under section 148A(d) was passed, and notice under section 148 of the Act was issued on 30/03/2023. In response to the notice issued under section 148 of the Act, the assessee filed its return of income declaring income similar to the original return. Subsequently, notice under section 143(2) of the Act was issued. From the submissions made by the assessee, it was found that during the year under consideration, the assessee earned short-term capital gains on the sale of non-convertible debentures of Alliance Infrastructure Projects Private Limited of INR 1,23,57,500 and interest income from Alliance Infrastructure Projects Private Limited of INR 4,25,13,811. Accordingly, the assessee was asked to show cause as to why the income of similar nature during the year under consideration should not be considered taxable income and brought to t....
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....milar addition made by the AO in respect of the investments in India. 8. On the other hand, the learned Departmental Representative ("learned DR") vehemently relied upon the order passed by the lower authorities. 9. We have considered the submissions of both sides and perused the material available on record. We find that the Hon'ble Jurisdictional High Court in Abu Dhabi Investment Authority v/s AAR, reported in [2021] 439 ITR 437 (Bombay), while deciding the writ petition in favour of the petitioner quashed the order dated 18/03/2020 passed by the Hon'ble AAR and held that the income that accrues to the Green Maiden A 2013 Trust is not chargeable to tax in India. The relevant findings of the Hon'ble High Court are reproduced as follows: - "31. In our view, therefore, the Deed of Settlement dated 22nd July 2013, whereby the trust was set up, contained specific clauses which established the revocable nature of the trust. As the ADIA has settled the trust on the terms mentioned in the Deed of Settlement, the contribution made by it to the trust would be a transfer as defined in section 63 of the Act. As Section 63 does not anywhere specify that a trust covered by it m....
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.... the beneficial provisions of the India-UAE DTAA. To take it further, even if the trust structure were to be discarded, then it must necessarily follow that the investment must be regarded as having been made by ADIA and hence the income would arise in the hands of ADIA which income would not be taxable in India by virtue of provisions of India-UAE DTAA. We have to note that there was no attempt whatsoever to reduce the tax liability by using the trust structure. When the provisions of the Trust Deed provided that ADIA has right to re-assume power over the entire income arising on the investments made by the trust in the portfolio companies, the entire income arising therefrom has to be in terms of section 61 of the Act to be assessed in the hands of ADIA. This would mean the exemption under Article 24 of India-UAE DTAA would be attracted. Even if for a moment we say that for any reason the provisions of section 61 are not applicable, then also the trustee can only be assessed in a representative capacity and, accordingly the provisions of section 160(i)(iv) will be applicable. Therefore, even if the income is taxed in the hands of the trustee in terms of section 161(1), it will be....
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....y the AO, by observing as follows: - "11. In view of the above facts and findings as discussed supra, it is evident that at the level of the assessing officer the writ petition filed by the assessee before the Hon'ble Bombay High Court was at the admission. stage. However, before issuing the direction by the DRP u/s 144C(5) of the Act on 16.02.2022, the Hon'ble Bombay High Court has already decided the writ petition filed by the vide order dated 28.10.2021 (supra). In this regard, the ld. DRP has categorically referred at para 7.14 of their order that the addition to the taxable income has proposed by the assessing officer in his draft assessment order on the basis of AAR ruling itself has already been reversed by the Hon'ble jurisdictional High Court. The DRP has also stated in their finding that question raised in the objection filed by the assessee are squarely covered by the decision dated 28.10.2021 of Hon'ble Bombay High Court. 12. Looking to the above facts, finding and decision of the Hon'ble Bombay High Court as supra we considered that the directions issued by the DRP are not justified, therefore, we set aside the final order passed b....