#beneficial ownership

ITAT Delhi rules a Mauritius entity holding a Category I GBL licence, FPI registration, and actual control over ECB funds satisfies the beneficial ownership test under Article 11 for interest income on ECBs lent to Indian group companies. The tribunal also denies the Section 194LD concessional withholding rate for non-convertible debentures.

The ITAT Delhi ruled that foreign shares held as a nominee are not taxable in the assessee’s hands, and any Section 10(1) notice must expressly state the relevant financial year. This clarifies that undisclosed foreign nominee assets escape tax liability unless properly disclosed, guiding tax practitioners and assessees with such holdings.

ITAT Delhi rules that mere PAN linkage and signatory status in a bank account do not meet the burden of proof under Section 68 of the Income Tax Act. The tribunal mandates documentary evidence of beneficial ownership to justify unexplained cash credits, impacting tax assessments involving high-value transactions.