Income deemed to accrue or arise in India - taxation of entire ...

Tribunal Grants Tax Treaty Benefits to UK LLP for Indian Legal Services, Overturns Prior Taxability Rulings.

April 10, 2024

Case Laws     Income Tax     AT

Income deemed to accrue or arise in India - taxation of entire revenue received by the Appellant from provision of legal services on Indian engagements - Fees for Technical Services (FTS) - The tribunal critically analyzed the appellant's claim to the benefits under the India-UK DTAA. The Revenue argued that the appellant, being a fiscally transparent entity in the UK, did not qualify as a 'resident' under the DTAA, and hence, was not eligible for the treaty benefits. The tribunal, however, was persuaded by the appellant’s argument, supported by precedents and the tax treaty's provisions, that the income taxed in the UK in the hands of its UK tax resident partners should entitle the LLP to treaty benefits. - The tribunal allowed the appeal in favor of the appellant, setting aside the orders of the lower authorities regarding the taxability under FTS and the denial of DTAA benefits.

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