INCOME TAX-10 vs M/S KRISHAK BHARTI COOPERATIVE LTD

Bench: 2 — B.V. Nagarathna, Prashant Kumar Mishra

In Brief

A multi-state cooperative society in India (KRISHAK BHARTI) formed a joint venture in Oman and received dividend income from it. Although the Indian tax authority initially allowed tax credit for this dividend, a later show cause notice challenged the credit. The Supreme Court held that under Article 8(bis) of Omani Tax Laws and Article 25(4) of the India-Oman Double Taxation Avoidance Agreement, the dividend income is exempt in Oman as a development incentive. Therefore, the assessee is entitled to the same tax treatment in India and no tax credit is due. The Court dismissed the appeals, upholding the previous decisions.

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Income Tax Double Taxation Avoidance Agreement International Taxation Dividend Income Permanent Establishment Tax Incentives Tax Credit

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