Consequently, the commissioner (appeals) upheld tax at 20% on curiosity earnings of about Rs 365 crore earned by it from Indian debt securities throughout FY19. As dividend earnings was exempt within the arms of shareholders, the dividend of practically Rs 700 crore was not a topic of dispute.
This led to ADIA submitting an enchantment with the Earnings Tax Appellate Tribunal. As a ‘govt’ physique it was entitled to tax exemption in India, underneath Article 24 of the India-UAE tax treaty. ITAT frowned on the actions of the decrease tax authorities and upheld the tax exemption.
Chartered accountants level out {that a} important variety of non-residents, within the absence of a cell quantity in India, have crammed on this 10-digit numerical code to add their I-T return. This ITAT order can even assist different non-residents who’ve or might face tax calls for due to this fictitious cell quantity entered by them.
Of their order, the ITAT bench confused that the tax treaty profit had been denied on a ‘very flimsy floor’. The explanation given by the commissioner (appeals) is that the cell quantity ‘9999999999’ was indicated by the Truecaller app to be a fraud quantity. On this foundation, the commissioner (appeals) surmised that ADIA is a fraud firm, somewhat it concluded that it isn’t an organization belonging to Abu Dhabi govt.
The ITAT bench identified, “As soon as all different particulars have been supplied, and if that’s doubted, then, he ought to have verified the PAN and the handle supplied within the return to see whether or not it’s an Abu Dhabi govt-owned firm. If he was incapable of verifying then, he ought to have requested the assessee (ADIA)… It’s actually stunning that the primary appellate authority (aka appellate commissioner) will deny the standing of govt-owned authority just by wanting up the cell quantity within the Truecaller app. Such an strategy is to be frowned upon and is liable to be rejected on the threshold.”
