Assessee, a tax resident of Singapore is  engaged in investment holding and general wholesale trade. It is  subsidiary company of company resident in BVI.  During year, assessee earned short-term capital gain on account of sale of shares of a company and claimed same to be exempt as per article 13 of DTAA. Assessing Officer held  that assessee’s holding company was situated in BVI with which India had no DTAA and in order to avail treaty benefits entire investment and sale transactions had been routed through Singapore entity and thus, he held assessee to be ineligible for treaty benefits due to lack of commercial substance in Singapore. DRP held  that Assessing Officer had not established that beneficial owner was BVI and directed him to verify whether affairs of assessee were controlled from outside Singapore. However, Assessing Officer had simply repeated what was said in draft assessment order. Assessing Officer had not made any efforts to make further verification but assessee had given enough evidences to prove that its entire affairs were not controlled from outside Singapore and it had duly reflected acquisition of shares in its balance sheet and its audited balance sheets were subjected to verification by Singapore tax authorities. Tribunal held that all  documents proved that affairs of assessee-company were not controlled from outside Singapore and, consequently, short-term capital gain was not taxable in India.  (AY. 2018-19)