Income Tax – DTAA and Omani Tax Laws – Benefit to the assessee under:
Held: A clarification letter dated 11.12.2000 (interpreting the provisions contained in Article 8 and Article 8 (bis) of the Omani Tax Laws) addressed by the Secretary General for Taxation, Sultanate of Oman, Ministry of Finance was issued which stated the dividend distributed by all companies, including the tax-exempt companies would be exempt from payment of income tax in the hands of the recipients – By extending the facility of exemption, the Government of Oman intended to achieve its object of promoting development within Oman by attracting investments – Since the assessee has invested in the project by setting up a permanent establishment in Oman, as the JV is registered as a separate company under the Omani laws, it is aiding to promote economic development within Oman and achieve the object of Article 8 (bis) – A plain reading of Article 8 and Article 8 (bis) would manifest that under Article 8, dividend is taxable, whereas, Article 8(bis) exempts dividend received by a company from its ownership of shares, portions, or shareholding in the share capital in any other company – Thus, Article 8(bis) exempts dividend tax received by the assessee from its PE in Oman and by virtue of Article 25, the assessee is entitled to the same tax treatment in India as it received in Oman – Insofar as the argument concerning the assessee not having PE in Oman is concerned, it is apparent that the assessee’s establishment in Oman has been treated as PE from the very inception up to the year 2011 – There is no reason as to why all of a sudden, the assessee’s establishment in Oman would not be treated as PE when for about 10 years it was so treated, and tax exemption was granted basing upon the provisions contained in Article 25 read with Article 8 (bis) of the Omani Tax Laws – Thus, appellant has not been able to demonstrate as to why the provisions contained in Article 25 of DTAA and Article
8 (bis) of the Omani Tax Laws would not be applicable. [Paras 15, 16, 17, 18 and 20]
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.