Assessee was a trustee of ING Emerging Markets Equity Based Funds (INGEMEF) established in Netherlands which was registered with Securities and Exchange Board of India as a sub-account of ING Assets Management BV, a registered Foreign Institutional Investor (FII). Assessee earned Short-Term Capital Gains (STCG) on sale of shares in India and claimed that they were treaty protected from taxation in India, under article 13 of India Netherlands Double Taxation Avoidance Agreement (DTAA) .Assessing Officer and Commissioner (Appeals) rejected plea of assessee and held that as it was a non-taxable entity in Netherlands, therefore benefit of article 13 could not be extended to it. Tribunal held that  assessee was a tax transparent entity, in sense that while INGEMEF was not taxable in its own right, constituents of INGEMEF i.e. three participant investors were taxable in respect of their respective shares of earning . As the income in question had actually accrued to taxable entities on Netherlands, which, according to approach adopted by Assessing Officer, was sine qua non for tax treaty protection  the treaty protection had indeed been wrongly declined to assessee. If assessee was to be taxed as a trustee in representative capacity, clearly, beneficiaries were three investors all of which were taxable entities in Netherlands. Accordingly capital gains, on sale of shares in hands of assessee and investors, it represents as trustee, were treaty protected from taxation in India.  (AY. 2007-08)