2024 (1) TMI 944

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..... - We find that this issue is no longer res integra in view of the recent Special Bench decision of Mumbai Tribunal in the case of DCIT Vs. Total Oil India Private Limited [ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income-tax (Tax on Distributed Profits) referred to in sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in section 115-O of the Act and not at the rate of tax applicable to the non-resident shareholders(s) as specified in the relevant DTAA with reference to such dividend income. Nevertheless, we are conscious of the sovereign's prerogati .....

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..... iation headsets. It imports goods from Sennheiser group companies for reselling through its distributors in India. The return of income for the assessment year 2019-20 was filed by the assessee company on 27.11.2019 which was later revised on 09.03.2020 declaring total income of Rs. 3,77,00,470/-. 5. During the year under consideration the assessee distributed dividends to its share holders (Senniheiser Global Operations GMBH, Germany and Sennheiser Electronic GMBH Co. KG, Germany) and paid DDT on distribution of dividends under section 115-O of the Act as under:- Dividends to share holders Particulars Total (Rs.) Sennhei .....

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..... cified in the relevant DTAA with reference to such dividend income. Nevertheless, we are conscious of the sovereign's prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAS. Thus, wherever the Contracting States to a tax treaty intend to extend the treaty protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any. Thus, the question before the Special Bench is answered, accordingly. 8. Respectfully following the aforesaid decision, the grounds raised by the assessee are hereby dismissed. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in the open .....

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