ITAT directs NR Company to pay 20% of Outstanding Demand of Income Tax, remaining in 180 days


Greeva Garg –

Published on August 26, 2021, at 16:35 IST

The Mumbai Bench of Income Tax Appellate Tribunal has directed the Non-Resident company, Blackstone FP Capital Partners Mauritius V Limited, to pay 20% of outstanding demand of Income Tax and stayed 80% of outstanding demand for 180 days.

The assessee, filed an application seeking for issuance of an interim stay for the realization of outstanding demand of Income Tax, amounting to Rs. 1,57,57,67,597 including interest charged under Section 234B and 234C of Income Tax Act, 1961 for the assessment year 2016-17.

The Coram headed by the Vice President, Pramod Kumar, and Judicial Member, Saktijit Dey held that “The Company must pay 20% of the outstanding demand, within a period of two weeks and furnish the proof of such payment before the Tribunal and the Assessing Officer (AO).”

The Coram added “For the balance 80% of the outstanding demand, it is directed to furnish a corporate guarantee from one of its associate enterprises in India, having assets exceeding the outstanding tax liability. The corporate guarantee shall be furnished by the assessee before the AO within a period of six weeks. Subject to fulfillment of the aforesaid conditions, recovery of the balance 80% of the outstanding demand shall remain for a period of 180 days from the date of this order or till disposal of the appeal, whichever is earlier,” .

Mr Porus Kaka, appearing for the Company submitted that the NR Company is a tax resident of Mauritius. The dispute in the appeal relates to the Long-term Capital Gains of the Company that arose out of the sale of shares of an Indian Company, CMS Info. Systems Limited.

Valid Tax Resident Certificate (TRC) has been issued by the Mauritius Revenue Authority for the Blackstone Company in the matter.

Mr Porus concluded by saying that the company is entitled to avail of the benefits granted under the India-Mauritius Double Taxation Avoidance Agreement which is binding on the Departmental Authorities and the Long-term Capital Gains accrued would not be taxable as per the provisions of the treaty.

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