| Case ID |
ffd9b229-cafb-47ab-807e-96ad31542aab |
| Body |
View case body. Login to View |
| Case Number |
IT Appeal Nos. 341 & 342 of 2012 |
| Decision Date |
Aug 21, 2014 |
| Hearing Date |
|
| Decision |
The Bombay High Court dismissed the appeals filed by the Director of Income Tax (International Taxation) against ICICI Bank Ltd. The court held that the bank was not liable to deduct tax at source on the income derived by its account holders from the sale of securities in India, as per the Double Taxation Avoidance Agreement between India and UAE. The court agreed with the Tribunal and the Commissioner of Income Tax (Appeals) that there was no substantial question of law involved, and the view taken by these authorities was not perverse or erroneous. |
| Summary |
In this landmark case, the Bombay High Court dealt with the interpretation of the Double Taxation Avoidance Agreement (DTAA) between India and UAE. The case revolved around the tax liabilities of ICICI Bank Ltd concerning the income derived by its UAE-based account holders from the sale of securities in India. The revenue department argued that the income should be taxed in India, contending that the DTAA was not a facilitating arrangement. However, the court found that the income was exempt from tax under Article 13 of the DTAA, as the capital gains were not taxable in the UAE. The court reviewed the findings of the Commissioner of Income Tax and the Tribunal, which had both ruled in favor of ICICI Bank. The judges noted that the transactions were undertaken in compliance with RBI guidelines and were supported by Chartered Accountant certificates. The court highlighted the importance of adhering to international treaties and agreements, emphasizing the DTAA's role in preventing double taxation. This judgment reaffirmed the principle that income not liable to tax in the country of residence should not be taxed in the source country, aligning with global tax practices. The decision has significant implications for multinational corporations and financial institutions operating in cross-border transactions, reinforcing the credibility of DTAA provisions in India. |
| Court |
Bombay High Court
|
| Entities Involved |
Director of Income Tax (International Taxation),
ICICI Bank Ltd
|
| Judges |
S.C. Dharmadhikari,
A.K. Menon
|
| Lawyers |
Arvind Pinto,
Ms. A. Vissanji,
S.J. Mehta
|
| Petitioners |
Director of Income Tax (International Taxation)
|
| Respondents |
ICICI Bank Ltd
|
| Citations |
2015 SLD 1635,
2015 370 ITR 17
|
| Other Citations |
Union of India v. Azadi Bachao Andolan [2013] 263 ITR 706/132 Taxman 373,
Asstt. DIT v. Green Emirate Shipping & Travels [2006] 100 ITD 203 (Mum.)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
Section 90
|