A fictional phone number lands Abu Dhabi Investment Authority in trouble with India's taxman
non-resident Indians, who don't own an Indian phone connection, one UAE fund decided to use a fake phone number to file for a tax exemption with Income Tax authorities only to be rebuffed.
According to chartered accountants, the fake phone number — 9999999999 — is regularly used by non-residents to file their returns.
In the case of the Abu Dhabi Investment Authority (ADIA), the number was flagged by tax authorities who doubted the veracity of the firm, having used the caller identification app Trucaller to find the 10-digit number marked as a spam caller.
Consequently, the Commissioner (Appeals) upheld tax at 20% on interest income of about Rs 365 crore earned by it from Indian debt securities during FY19. The ADIA had hoped for a tax exemption under Article 24 of the India-UAE tax treaty, as it was a 'government' body. Income earned by the ADIA from dividends — nearly Rs 700 crore — was already exempt as it was in the hands of shareholders.
ADIA challenged the Commissioner's ruling at the Income Tax Appellate Tribunal (ITAT), which ended up upholding the tax exemption, saying that the lower tax authorities' order was on ‘very flimsy ground’.
“Once all other details have been provided, and if that is doubted, then, he should have verified the PAN and the address provided in the return to see whether it is an Abu Dhabi govt-owned company. If he was incapable of verifying then, he should have asked the assessee (ADIA)… It is really surprising that the first appellate authority (aka Appellate Commissioner) will
