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INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
M. Balaganesh, A.M., Vikas Awasthy, J
BLACKBIRD CAPITAL II LIMITED FOREIGN – Appellant
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAX - 1(1)(2) DELHI – Respondent
| Table of Content |
|---|
| 1. the nature of lease agreements affects tax liabilities. (Para 1 , 2) |
| 2. arguments presented regarding the demand and stay application. (Para 3) |
| 3. court observations on the merits and previous cases. (Para 4 , 5) |
| 4. final decision to allow the stay application. (Para 6) |
ORDER
PER M. BALAGANESH, A. M.:
1. By virtue of this stay application, the assessee seeks to keep the demand raised for the AY 2022-23 in abeyance.
2. We have heard the rival submissions and perused the material available on record. The assessee is based on Ireland, engaged in the business of leasing aircraft. The assessee is a tax resident of Ireland. The assessee had leased aircraft to an Indian entity on operating lease basis and received lease rentals thereon. The lease rental income of the assessee is not taxable in India under India-Ireland Double Taxation Agreement (DTAA). In the assessment proceedings, the ld AO re-characterized the operating lease as finance lease in the draft assessment order by holding that return of aircraft at the end of lease period tantamount to repayment of principal portion of the finance lease. The assessee filed objections before the ld DRP which upheld the draft asse
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