India: Tax residency certificate presumptive proof of business activity for purposes of India-Mauritius treaty
Delhi bench of the Tribunal decision
The Delhi bench of the Tribunal held that the taxpayer’s tax residency certificate was presumptive proof of business activity in Mauritius for purposes of qualifying for benefits under the India-Mauritius income tax treaty.
The taxpayer, a Mauritius company, claimed capital gains it realized on a transfer of shares of an India company were exempt from tax in India under the treaty. The tribunal found in the taxpayer’s favor because the tax authority had no evidence to rebut the statutory presumption based on the taxpayer’s tax residency certificate that the taxpayer was engaged in business activity in Mauritius, and thus qualified as the beneficial owner of the shares, for purposes of claiming benefits under the treaty.
The case is: India Property (Mauritius) Company-II v. ACIT
Read a July 2024 report prepared by the KPMG member firm in India