Law:

Section:

ORDER 1. This appeal challenges the order passed by the Commissioner and by the Tribunal. 2. The concurrent findings in the peculiar facts are that the respondent-assessee was not liable to deduct the tax at source on the income which its constituent or an Account holder derives from sale of securities. 3. Mr. Pinto appearing on behalf of the revenue would submit that the appeal raises substantial question of law and as formulated in the memo of appeal. He submits that the Double Taxation Avoidance Agreement is not a facilitating arrangement and merely because the capital gains are not subjected to tax in the State or in the country to which the constituent or account holder belongs namely UAE in this case, does not mean that the source of the income would not be liable to be taxed under Indian Law. Therefore, account holder or constituent having earned the income from the sale of securities in India, that income has not been remitted from India to UAE that the bank was liable to deduct the tax at source. 4. The Assessing Officer according to Shri Pinto probed the transaction in details and arrived at the above conclusion which is summarized by Mr. Pinto. The Commissioner of Income Tax as also the Tribunal erred in reversing this conclusion and by relying on the clauses of Double Taxation Avoidance Agreement between India and UAE. That the constituent or the account holder of the respondent bank was not obliged to pay any tax on the gain which have been derived in India in the country where he resides or belongs to, according to Shri Pinto, is the erroneous foundation on which the Assessing Officer's order has been set aside. 5. Ms. Vissanji appearing on behalf of the assessee would submit that none of the questions and which have been formulated by the revenue can be termed as substantial question of law. Firstly, she relies upon the Double Taxation Avoidance Agreement and clarifies that the ICICI bank namely the assessee has contracted with the UAE resident to a limited extent of allowing him to open an account in India with the assessee, depositing the monies in the account of the account holder and which is the income derived from sale of securities by the…

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