DTAA benefits

Capital Gain — Transfer of shares and securities — Expression “liable to tax” in Contracting State as used in Art 4(1) of Indo–UAE DTAA does not necessarily imply that person should actually be liable to tax in that Contracting State — as held by DelTrib in DDIT v Mustaq Ahmad Vakil — In favour of: The assessee.

The short-term capital gain earned by the assessee resident of UAE on account of the transfer of shares and securities cannot be taxed in India merely on the ground that there is no tax leviable on an individual in the UAE.

Decided on: 26 August 2011.