ITAT dismisses refund of excess DDT paid to non resident company [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Delhi bench, dismissed the refund of excess Dividend Distribution Tax- DDT paid to non-resident companies. The assessee, Sennheiser Electronics India Private Limited, is engaged in the business of sales and distribution of headphones, microphones, monitoring systems, tour guide systems, and aviation headsets. It imports goods from Sennheiser group companies for resale through its distributors in India.

During the year under consideration, the assessee distributed dividends to its shareholders and paid DDT on the distribution of dividends under section 115-O of the Income Tax Act. The assessee claimed a refund of excess DDT paid to a non-resident company, which was denied by the AO. Aggrieved, the assessee filed a further appeal before the NFAC, who also denied it. Thereafter, the assessee filed a second appeal before the tribunal.

The tribunal observed that when dividends are declared, distributed, or paid by a domestic company to a non-resident shareholder(s) under section 115-O of the Income Tax Act, the additional income tax payable by the domestic company shall be at the rate mentioned in section 115-O, not at the rate specified in the relevant DTAA with reference to such dividend income.

After reviewing the facts and records, the two-member bench of Padmavathy S ( Accountant Member ) and Amit Shukla ( Judicial Member ) dismissed the refund of excess Dividend Distribution Tax paid to non-resident companies. Poonam Ahuja, Advocates, appeared for the assessee, and Sanjay Kumar, counsel, appeared for revenue. Therefore, the bench dismissed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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