$~10In The High Court Of Delhi At New Delhi+Ita 266/2024Pr. Commissioner Of Income Tax (Central),Gurugram v. Nectar Life Sciences Ltd

$~10*IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 266/2024PR. COMMISSIONER OF INCOME TAX (CENTRAL),GURUGRAM.....AppellantThrough:Mr.SanjayKumar,Ms.MonicaBenjamin & Ms. Easha Kadian, Advs.*IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 266/2024PR. COMMISSIONER OF INCOME TAX (CENTRAL),GURUGRAM.....AppellantThrough:Mr.SanjayKumar,Ms.MonicaBenjamin & Ms. Easha Kadian, Advs. Versus NECTAR LIFE SCIENCES LTD......Respondent Through:Ms. Radhika Suri, Sr. Adv. with Mr.Abhinav Narang, Adv. CORAM:HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MR. JUSTICE TUSHAR RAO GEDELAO R D E R % 14.01.2025 1.The Revenue has filed the present appeal under Section 260A of theIncome Tax Act, 1961 (hereafter the Act) impugning an order dated01.08.2022 (hereafter the impugned order) rendered by the Income TaxAppellate Tribunal (hereafter ITAT) in ITA No.761/Chd/2011 in respect ofthe assessment year (AY) 2006-07. The Revenue has projected the followingquestion of law for consideration of this Court: “A.Whether in the facts and circumstances of the case and in law,the Hon'ble ITAT was right in dismissing the appeal of therevenue on the issue of taxability of dividend received by theassessee from its Sri Lankan Subsidiary in view of theprovisions of sub-section 3 of Section 90 of the Income TaxAct, 1961 as well as in view of notification No. 91/2008 ofCBDT?the Hon'ble ITAT was right in dismissing the appeal of therevenue on the issue of taxability of dividend received by theassessee from its Sri Lankan Subsidiary in view of theprovisions of sub-section 3 of Section 90 of the Income TaxAct, 1961 as well as in view of notification No. 91/2008 ofCBDT? 2.The controversy involved in the present appeal relates to the taxabilityof the income received by the respondent (assessee) by way of dividend fromits subsidiary company incorporated in Sri Lanka. 3.Mr. Sanjay Kumar, the learned counsel appearing for the Revenuereferred to paragraph 41 of the impugned order which records that the assessee had claimed exemption of the amount of dividend received from itsSri Lankan subsidiary company under Section 10(34) of the Act. He submitsthat Section 10(34) of the Act is inapplicable as it applies to the companiescovered under Section 115-O of the Act, which in turn refers to domesticcompanies. He, however, does not dispute that the issue regarding taxabilityof dividend is in favour of the assessee by virtue of the decision of theSupreme Court in Deputy Commissioner of Income Tax v. TorqouiseInvestment & Finance Ltd.: [2008] 300 ITR 1. He states that the saiddecision was rendered in the context of Indo Malaysian Double TaxationAvoidance Agreement, which is pari materia to the Indo-Sri Lankan DoubleTaxation Avoidance Agreement. 4.The learned senior counsel appearing for the assessee further submitsthat in subsequent assessment years (being AYs 2007-08 and 2008-09) theRevenue has accepted that the dividend from its Sri Lankan subsidiarycompany is not taxable and no addition in this respect has been proposed bythe Assessing Officer in those years. 5.Since it is not disputed that the dividend received by the assessee fromits Sri Lankan subsidiary company, is not taxable, no substantial question oflaw arises for consideration of this Court in the present appeal. 6.The appeal is accordingly dismissed. VIBHU BAKHRU, ACJ JANUARY 14, 2025 ‘gsr’ TUSHAR RAO GEDELA, J Click here to check corrigendum, if any