S. 90 : Double taxation relief-Long term capital gains-Transfer of shares-Beneficial Owner-cannot be assumed or inferred-AO to decide whether the concept of “beneficial owner” is inbuilt in the scheme of Article 13-Matter remanded-DTAA-India-Mauritius. [S. 143(3), 154, Art. 10, 11, 13(4)]
Assessing Officer held that the income of Rs. 904.98 crores earned by the assessee is in the nature of long term capital gains. The Assessing Officer held that the assessee company is claiming to be a wholly owned subsidiary of Blackstone FP Capital (Mauritius) VA Ltd Cayman Islands, had no independent existence. Its entire activity was controlled and directed as per the directions of its affiliates. The entire scheme of purchase and sale of shares was designed for the benefit of the entities in Cayman Islands of Blackstone Group, in the veil of carrying out transactions through them. Therefore, considering totality of fact the assessee is not entitled for the benefit of DTAA with Mauritius. Tribunal held that the the concept of beneficial ownership being a sine qua non to entitlement to treaty benefits cannot, in the absence of specific provision to that effect, cannot be inferred or assumed. The matter was remanded back to the Ld. Assessing Officer to adjudicate upon foundational issues, i.e., whether the concept of ‘beneficial ownership’ is inbuilt in the scheme of Article 13 of Indo-Mauritius DTAA and, if so, what are the connotations of ‘beneficial ownership’ in this context. (ITA Nos. 981 & 1725/Mum/2021 dt. 17-5-2022. (AY. 2016-17)
Blackstone FP Capital Partners Mauritius V Ltd. v. DCIT (Mum.)(Trib.) www.itatonlne.org

[Coram : Hon’ble Shri Pramod Kumar (Vice President), and Hon’ble Shri Pavan Kumar Gadale (Judicial Member)]