Delhi ITAT Allows DTAA Benefit on DDT; Caps DDT at 10% under Indo-Japan DTAA
The Hon’ble Delhi Income Tax Appellate Tribunal (hereinafter referred to as ‘Delhi ITAT’) in the case of Mitsui Kinzoku Components India Pvt. Ltd. v. CIT (Appeals)1, National Faceless Appeal Centre, Delhi, relying on the Bombay High Court’s landmark ruling in Colorcon Asia Pvt. Ltd. [2025] 181 taxmann.com 301, has held that Dividend Distribution Tax (“DDT”) on dividends paid by an Indian company to its Japanese parent is governed by the India–Japan DTAA and cannot exceed the treaty-prescribed rate. The Tribunal further held that the Bombay High Court’s decision in Colorcon Asia is binding and conclusively settles the controversy, rendering reliance on the ITAT Special Bench ruling in Deputy Commissioner of Income-tax vs. Total Oil India (P.) Ltd. [2023] 149 taxmann.com 332 misplaced.
