IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS PADMAVATHY S, AM &

SHRI RAJ KUMAR CHAUHAN, JM I.T.A. No. 1130/Mum/2025 (Assessment Year: 2022-23)

M/s 3 Sigma Global Fund, ACIT, International Circle-4(2)(1), C/o 605, Zee Nayak, M.G. Road, 1708, 17^th Floor, Air India Building, Vs.

Vile Parle (E), Mumbai-400057. Nariman Point, Mumbai-400021.

PAN: AABCZ3540L Appellant) : Respondent I.T(IT) A. No. 1119/Mum/2025 (Assessment Year: 2022-23)

M/s 3 Sigma Global Fund, ACIT, International Circle-4(2)(1), 8^th Floor, C/o Anex Management 1708, 17^th Floor, Air India Building, Services Ltd., Ebene Tower, V s. Nariman Point, Mumbai-400021.

52 Cybercity, Ebena, Mauritius.

PAN: AABCZ3540L Appellant) : Respondent Appellant /Assessee by : Bhaumik Goda, AR Revenue / Respondent by : Shri Krishna Kumar, Sr. DR Date of Hearing : 19.06.2025 Date of Pronouncement : 26.06.2025 O R D E R Per Bench:

These appeals by the assessee are against the final order of assessment of the Assistant Commissioner of Income Tax, International Circle-4(2)(1), Mumbai [In short 'AO'] passed under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the Act) dated 16.01.2025 for AY 2022-23.

2. The ld. AR at the outset submitted that the assessee has filed appeal against the order of the AO both manually and through e-filing portal. The ld. AR further submitted that two ITA Numbers have been erroneously allotted and therefore the appeal in ITA No. 1119/Mum/2025 can be treated as withdrawn. We in this regard notice that the assessee vide letter dated 20.06.2025 has sought for withdrawal of appeal in ITA No. 1119/Mum/2025 for the reason that it is a duplicate of the appeal in ITA No. 1130/Mum/2025. Accordingly appeal in ITA No. 1119/Mum/2025 is dismissed as withdrawn.

ITA No. 1130/Mum/2025

3. The assessee is a public limited company registered under the laws of Republic of Mauritius and holds global business licence issued by Financial Service Commission in Mauritius. The assessee also holds a tax residence certificate issued by Mauritius Revenue Authority. The assessee for the year under consideration filed the return of income on 29.10.2022 declaring total income of Rs. 18,04,89,140/- consisting of Short Term Capital Gain (STCG) of Rs. 17,80,87,555/-, Income from Derivatives of Rs. 1,88,73,621/- and Dividend Income of Rs. 24,01,580/-. The assessee claimed exemption of income arising from Derivatives as per Article 13(4) of India-Mauritius DTAA. Assessee's case was selected for scrutiny and the statutory notices were duly served on the assessee. The AO issued a show-cause notice in order to verify the genuineness of the claim of the assessee for applying provisions of India-Mauritius DTAA. The AO after perusing the details filed by the assessee held that the assessee failed the Principle Purpose Test and accordingly is not entitled for treaty benefits. The AO therefore brought to tax the income from Derivatives and made additions in this regard while passing the draft assessment order. The assessee raised further objections before the DRP against the draft order of the assessee. The DRP held that the assessee is entitled for the treaty benefits and the relevant observations of the DRP in this regard are extracted as under:

“Panel has examined the matter of denial of India-Mauritius DTAA benefits to the applicant on basis of Beneficial Ownership concept.

It is noteworthy that the Assessing Officer has not examined the substance of the applicant company. There is no enquiry into the business transactions of the applicant. The Assessing Officer has not made any investigation into the situs of Board of Directors of the company, the location of AGMs, location of investment decisions, place of effective management, situs of decisions of the company etc.

The Assessing Officer has only applied the "beneficial ownership" (BO) concept in a blanket manner. Even after applying the beneficial ownership principle, the Assessing Officer has not examined the eligibility of the clai