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TMI Blog2023 (5) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee - there is no Linkling in the assessment order as to what explanation was given by the assessee. The assessment order only mentions that the assessee filed details. What details were filed is not forthcoming from the assessment order. However, the details examined by the Ld. AO are not known. No reasons have been recorded by him to arrive at the conclusion that income returned by the assessee at Rs. Nil is acceptable and conforms to the legal position. Nothing is discernable as to how the issues raised were examined and found acceptable by him. In such a scenario wherein the assessment is completed without any enquiry/verification of the issues involved, in Gee Vee Enterprises vs. Addl. CIT [ 1974 (10) TMI 29 - DELHI HIGH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in law, the Ld. CIT grossly erred in holding that the appellant is not entitled to the benefit of India-Mauritius Double Taxation Avoidance Agreement (India- Mauritius DTAA). 4. In the facts and circumstances of the case and in law, the Ld. CIT grossly erred in holding that the long-term capital gains of INR 149,37,42,732 earned by the appellant on sale of listed securities (on which securities transaction tax has been paid) is taxable in India u/s 115JB of the Act. 3. Briefly stated, the assessee is a non-resident company engaged mainly in the business of investment holding. For AY 2017-18, it filed its return declaring income at Rs. Nil. The case was selected for complete scrutiny through CASS to examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India-Mauritius Double Taxation Avoidance Agreement ( India-Mauritius DTAA ). It also submitted a Tax Residency Certificate ( TRC ) to support its claim. The Ld. CIT was of the view that the Ld. AO did not carry out factual inquiry/verification to ascertain that the assessee is a genuine investor or not. He should have called for and verified the details of key personnel who manage the investment decisions of the fund. The Ld. AO did not do so. According to him, it is essential to ascertain whether the fund manager creates a Permanent Establishment (PE) for the assessee or in case fund is controlled and managed in India, then the assessee may be treated as a resident for tax purposes in India leading to different tax consequences in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his order. He summarised the following facts which emerged from his discussion in the preceding paras: 10.10 Summary In a nutshell, following facts emerges: 1 The scheme of arrangement employed by the assessee is a tax avoidance through treaty shopping mechanism. 2 The assessee company is just a conduit and the real owner is the shareholders/investors who are tax residents of different countries. 3 The TRC is not sufficient to establish the tax residency if the substance establishes otherwise. 4 The assessee company is also not a beneficial owner of income as control and dominion of fund is not with the company, 5 There is no commercial rationale of establishment of assessee company in Mauritius as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT-DR and perused the records. It is revealed from para 3 of the impugned assessment order that during the course of assessment proceedings, the Ld. AO communicated the reasons for selection of case and sought the explanation of the assessee. However, there is no inkling in the assessment order as to what explanation was given by the assessee. The assessment order only mentions that the assessee filed details. What details were filed is not forthcoming from the assessment order. However, the details examined by the Ld. AO are not known. No reasons have been recorded by him to arrive at the conclusion that income returned by the assessee at Rs. Nil is acceptable and conforms to the legal position. Nothing is discernable as to how the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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