No Denial of DTAA Benefit Just Because Assessee’s Mobile No. Was Found to Be a Fraud on ‘Truecaller’ | ITAT

Case Details: Abu Dhabi Investment Authority vs. DCIT - [2024] 160 taxmann.com 104 (Mumbai-Trib.)

Judiciary and Counsel Details

• • Amit Shukla, Judicial Member & Amarjit Singh, Accountant Member
  • Dhanesh Bafna, Ms Hirali Desai & Nirmal Hardik for the Appellant.
  • Anil Sant, Sr. D.R. for the Respondent.

Facts of the Case

The assessee was a tax resident of the United Arab Emirates (UAE) with a valid tax residency certificate for the relevant assessment year. The assessee was a Category 1 Foreign Portfolio Investor (FPI) in accordance with the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations 2019.

While furnishing the return of income, the assessee claimed the benefit of India-UAE DTAA. During the assessment proceedings, the Assessing Officer (AO) denied the benefit claimed in the return of income, contending that the mobile no. was given ‘9999999999 ‘and from the true caller, it was found that it was a fraud having several spam reports.

On appeal, CIT(A) confirmed the additions made by the A.O. and the matter reached before the Mumbai Tribunal.

ITAT Held

The Tribunal held that the benefit to the assessee was denied on a very flimsy ground. The reason given was that the mobile number was mentioned as “9999999999,” which he tried to find from True Caller as a fraud number. Accordingly, it contended that the Abu Dhabi Investment Authority is a fraudulent company, not a company belonging to the Abu Dhabi Government.

The assessee duly furnished all other particulars, and the CIT(A) should have cross-checked the PAN and address given in the return to ascertain if they correspond to an Abu Dhabi government-owned entity. If unable to verify independently, he should have sought clarification from the taxpayer.

It was really surprising that the first appellate authority denied the status of the Government-owned authority simply by looking at the mobile number in the true caller.

Such an approach was to be frowned upon and liable to be rejected at the threshold. If the assessee, i.e. Abu Dhabi Investment Authority, had shown its valid registration as a category of foreign portfolio investor obtained with SEBI, held a valid residency certificate and given the particulars of income, then there would have been no reason to doubt that it was not an authority as mentioned in DTAA.

Accordingly, it was held that the assessee was liable for the benefit provided under Article 24 which provides that the Government of one contracting state shall be exempt from tax in other contracting states with respect to any income derived by such income from that other contracting state.