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Off-Shore Distribution Income is not Taxable from the hands of Non-Resident who did not carry out business in India: ITAT

Credit Suisse (Singapore) Ltd (ITA no.7262/Mum./2019)


  1. The assessee and HDFC Asset Management Co Ltd had entered into a Offshore Distribution Agreement dated 06/09/2011 pursuant to which the assessee agreed to distribute Mutual Fund schemes launched by HDFC Asset Management Co Ltd, with a view to procure subscriptions for such schemes from investors outside India.
  2. The assessee is a company incorporated in Singapore under the Singapore Companies Act. The assessee is a tax resident of Singapore and accordingly, is entitled to the beneficial provisions of India Singapore Double Taxation Avoidance Agreement (DTAA).
  3. The AO submitted that the HDFC Mutual Fund in which assessee has dealt is regulated and controlled by SEBI and RBI in India, which creates sufficient nexus of offshore distribution income with India and thus the said income is taxable in India under Article 23 of DTAA r.w.s. 5(2) of the Act.

ITAT Mumbai held as below:

  1. All the operations of the assessee were carried out outside India, therefore, in such circumstances offshore distribution commission income earned by the assessee cannot be treated as being reasonably attributable to any operation carried out in India.
  2. Appeal filed by the revenue is dismissed.

Tax – Intellex Strategic Consulting Pvt Ltd,,,


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