The assessee is a trustee of ING Emerging Markets Equity Based Funds (INGEMEF) which is registered with the Securities and Exchange Board of India as a sub account of ING Assets Management BV, a registered Foreign Institutional Investor (FII). \u00a0There is no dispute that INGEMEF is a tax transparent entity, in the sense that while INGEMEF is not taxable in its own right, the constituents of INGEMEF are taxable in respect of their respective shares of earning. \u00a0The form of its organization is FGR. \u00a0i. e. \u00a0Fonds voor Gemene Rekening, which literally means funds for joint account, and this form of organization, under the Dutch law, is in the nature of a contractual arrangement between the investors, fund manager and its custodian. \u00a0The investors in this case are three entities-namely, ING Institutioneel Emerging Equity Market Fund (INGIEEMF, in short) with a participation share of 53. 86%; Nationale-Nederlanden Levensverzekering Maatschappij NV (NNLNV, in short) with a participation share of 19. 66% and ING Beleggingfondsen Paraplu N. V. \u00a0(INGBPNV, in short) with the participation share of 26. 48%. \u00a0These three investors thus account for 100% of INGEMEF ownership. \u00a0The funds so held by INGEMEF are invested through the custodian, i.e. \u00a0the assessee who is legal owner of the investments on behalf of the investors, made on the advice of the fund manager ING Asset Management BV (INGAMBV, in short). \u00a0\u00a0The AO denied the benefit of exemption of DTAA, which was affirmed by CIT(A). \u00a0On appeal Ground before the Tribunal is \u201cWhether the On the facts and in the circumstances of the case and in law, the Ld. \u00a0Commissioner of Income Tax Appeals\u00a0 erred in upholding the action of the Deputy Director of Income Tax (IT) in denying the benefit of Article 13 of the India\u2013Netherlands Double Taxation Avoidance Agreement (\u201cDTAA\u201d) and consequently, taxing the capital gains amounting to RS.23,38,08,365\/ \u2013 as per the Income Tax Act, 1961.\u201d<\/p>\n
The Honourable Tribunal considering the provisions of the\u00a0 DTAA held that when an assessee is a representative assessee of a tax transparent entity, it is the status of beneficiaries or constituents of tax transparent entities which is relevant for the purpose of determining treaty protection. \u00a0Accordingly the capital gains is not table in\u00a0 India and entitle to the benefit of DTAA. \u00a0(Linklaters LLP 9 ITR (Trib) 217 (Mum) followed). \u00a0(ITA No. \u00a07119\/Mum\/2014, dt. \u00a027. 11. 2019)(AY. \u00a02007-08)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 160 : Representative assessee-Transparent entities-When an assessee is a representative assessee of a tax transparent entity, it is the status of beneficiaries or constituents of tax transparent entities which is relevant for the purpose of determining treaty protection\u2013DTAA\u2013India\u2013Netherlands. [S. 10(38), 45, Art.13]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8693","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-2gd","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=8693"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8693\/revisions"}],"predecessor-version":[{"id":9278,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8693\/revisions\/9278"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=8693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=8693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=8693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}