Refund of DDT

 In the case of Polycab India Ltd. (Mumbai ITAT), the Tribunal allowed a refund of DDT paid on dividends distributed to International Finance Corporation (IFC), citing its immunity under Section 9 of Article VI of the IFC Act, 1958. The judgment interpreted that when an entity enjoys complete tax exemption, such exemption should extend fully to include dividends received, thereby making the distributing company (Polycab) eligible for a DDT refund on that portion.

Conversely, the Intertek India Pvt. Ltd. (Delhi ITAT) ruling denied such refund, relying on the decision in Total Oil India Pvt. Ltd. which held that exemption to the recipient does not nullify the DDT liability of the payer.

The contrasting decisions raise concerns over uniform interpretation, especially given Section 115-O(1A) and the implications on tax treaty benefits under Section 90(2). The Polycab ruling, though favorable to taxpayers, might fuel further litigation due to its potential expansive interpretation of exemptions and its broader implications on international tax jurisprudence.