LOPAREX HOLDING BV,MUMBAI V. ACIT, INTERNATIONAL TAXATION, CIRCLE-3(1)(2), MUMBAI

ITA 4813/MUM/2023

AI Insights

Loparex Holding BV, a non-resident company and subsidiary of Loparex International BV, appealed against the final assessment order by the Assistant Commissioner of Income-tax, which taxed its dividend income from Loparex India Pvt. Ltd. at 10%. The assessee argued for a 5% tax rate based on the MFN clause in the India-Netherlands DTAA, referencing the India-Slovenia DTAA. However, the tribunal, referencing a Supreme Court decision and the conditions stipulated in the CBDT Circular No. 3/2022, found that the MFN clause could not be applied as the necessary conditions were not satisfied, particularly the requirement for a separate notification under Section 90 of the Income Tax Act, 1961.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473734 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2021-2022
• Other Referred Cases: AO vs. Nestle S.A.
• Laws Referred To: Income Tax Act, 1961, India-Netherlands DTAA, India-Slovenia DTAA
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Keywords: Business income; Reasonable cause; TDS; Double taxation relief; Residential status
• Section: 90; 274

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI RENU JAUHRI (ACCOUNTANT MEMBER) I.T.A. No.4813/Mum/2023 Assessment Year: 2021-22 Loparex Holding BV 901-902, First Avenue, 9th Floor, Goregaon- Mulund Link Road, Near Inorbit Mall, Malad West, Mumbai – 400 064 PAN: AAECL3546M Vs. Assistant Commissioner of Income-tax International Taxation, Circle – 3(1)(2), Mumbai (Appellant) (Respondent) Appellant by None Respondent by Shri Krishna Kumar, SR. D.R. Date of Hearing 19.02.2025 Date of Pronouncement 28.02.2025 ORDER Per: Smt. Beena Pillai, J.M.: The Present appeal filed by the assessee is against the final assessment order dated 27/10/2023 passed by ACIT International taxation Circle (1)(2), Mumbai for assessment year 2021-22 on following grounds: 2 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV “1.1. The Ld. AO has erred in finalizing an order of assessment which suffers from legal defects and is erroneous such as being passed without adequate inquiries and as such is liable to be quashed. 1.2. The lower authorities have erred in taxing the dividend income of the Appellant amounting to INR 26,99,97,500 at 10% as per Article 10 of the India-Netherlands DTAA. 1.3. The lower authorities have erred in taxing the dividend income without giving benefit of the lower tax rate of 5% as per the India- Netherlands DTAA read with the India-Slovenia DTAA by invoking the MFN Clause as per Clause IV of the Protocol. 1.4. The lower authorities have, in the facts and circumstances of the case and in law, erred in relying on Circular No. 3/2022 dated February 03, 2022, issued by the Central Board of Direct Taxes (\"CBDT\") and thereby denying the benefit of the MFN clause to the Appellant. 1.5. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in levying any consequential additional interest under section 234D of the Act. 1.6. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in not granting the TDS credit with regard to the interest amount received on the refund. 1.7. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 274 read with section 270A of the Act, for underreporting of income. 1.8. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 274 read with section 270A of the Act, for misreporting of income.” Brief facts of the case are as under: 2. The assessee is a non-resident company incorporated as per the laws of Netherlands and of wholly-owned subsidiary of Loparex International BV, Netherlands. It filed its return of income for the year under consideration on 14/03/2022 disclosing total income of ₹27,84,85,278/-. It was observed that, the assessee earned dividend from its subsidiary company 3 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV Loparex India Pvt. Ltd. 66 the live video observed that assessee offered the dividend tax at 5%. 2.1 The Ld.AO called upon the assessee to furnish details in order to justify its claim of taxing dividend in India at 5%. In response, the assessee submitted that, as per Article 10 of the India-Netherlands Double Taxation Avoidance Agreement (hereinafter referred to as DTAA), taxes on dividend can be levied in the country in which the company paying such dividend resident. It was submitted that company that paid dividend to the assessee is a tax resident of India and the taxes therefore shall be subject to a maximum rate of 10%. 2.2 It was further, submitted that, assessee being a beneficial owner of dividends, the rate at which tax can be levied in India on such dividend income is capped at 10% as per Article 10 of the India-Netherlands DTAA. The assessee referred to the Protocol of the India-Netherlands DTAA wherein it provides for Clause IV, that reads as under: The \"Most Favored Nation\" (\"MFN\") clause which seeks to restrict India's right to tax under the India-Netherlands DTAA by importing the restricted scope/ lower rate of tax provided in any DTAA between India and a third state, subject to the following conditions: That the said DTAA contains a scope more restricted than the rate or scope provided in the India-Netherlands DTAA, That the said DTAA was entered into after the date of signing of the India-Netherlands DTAA, That the said State is a member of the OECD, and That the effective date for the operation of this clause shall be the date on which the restricted scope/rate is made effective under the DTAA with the Third state. 2.3 The DTAA entered into between India and Slovenia is on 17/02/2005 that provides for taxation of dividend by India at the rate of 5% of the gross amount, where the said dividend is paid to 4 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV a resident of the other state, if the beneficial owner of dividend holds directly at least 10% of the capital of the company paying dividends. 2.4 Accordingly, the assessee invoked the MFN clause provided in the Protocol to India-Netherlands DTAA and offered the dividend income to tax at the rate of 5% as per the India-Slovenia DTAA in its return for year under consideration. 2.5 The Ld.AO, disagreed with the submissions of assessee and passed Draft Assessment Order on 27/12/2022, proposing to tax the dividend income received by the assessee at 10%. 3. On receipt of the draft assessment order, the assessee preferred objection before the DRP. 3.1 The Ld.DRP, vide the directions dated 22/09/2023 upheld the proposition of the Ld.AO to tax the dividend income received at 10% as per Article 10 of the India-Netherlands UTAA, denying the beneficial rate of 5% as per the MFN clause. 3.2 On receipt of DRP direction, the Ld.AO passed the final assessment order incorporating the directions and taxing, the dividend income of INR 26,99,97,500/- received by the assessee at 10%. Against the final assessment order, the assessee is in appeal before this Tribunal. 4. It is noted that the said appeal was filed on 27/12/2023. Subsequently the appeals was fixed for hearing on 27/05/2024, 05/06/2024, 12/06/2024, 01/08/2024, 06/10/2024, 13/01/2025, On all these dates, the assessee filed letters seeking time by submitting that, authorised representative is travelling with prior professional commitments. It is noted that, on every 5 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV date the assessee was always well informed about the next date of hearing and diligently assessee kept on filing adjournment letters stating one reason or the other. It is noted that, the assessee has not filed letter of authority and has been submitting that its authorised representative is held up with prior professional commitments. Further, also noted that, assessee never personally appeared before the court but always sought adjournments by filing letters in advance. 4.1 It is not the case that assessee is not aware about the dates of hearing. Further it is noted that every time the date is granted, it is upon the choice of the assessee and therefore there is no sufficient and reasonable cause to seek adjournment every time the appeal is listed for hearing. Even today on 19/02/2025, the assessee filed letter seeking time by submitting that the authorised representative is held up with prior professional commitment. Thus in our considered opinion the assessee has not shown sufficient cause for non-appearance of it through an office bearer being an authorised representative or a professional to whom authorities has been given to appear and argue the assessee’s case. Further it is noted that the issue contended by the assessee is no longer res integra by virtue of decision of Hon’ble Supreme Court in case of AO v/s. Nestle S.A. repeated in (2024) 165 taxmann.com 334. We therefore do not find any reason to keep this appeal pending. We therefore reject the adjournment application filed before this Tribunal and decide the issue on merit as under. The Ld.DR filed following submissions on merits of the addition. 6 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV “The Honourable Members ITAT I' Bench Mumbai Respected Sir/Madam, Date of hearing-05/06/2024, Subject: ITA No.4813/M/2023 Loparex Holding BV PANAAECL3546M Α.Υ.2021-22 Kindly refer to the above. The following written submission on behalf of the revenue department may kindly be taken on the records. It is respectfully submitted that the revenue department relies upon the factual and legal findings made by the A.O. in the assessment order followed by the order passed by the Hon'ble DRP. During the year under consideration, the Assessee had earned Rs.27,84,85,278/- as Dividend Income from Indian companies, which the Assessee offered to tax @5% on gross basis. This was in contravention to the provisions of the Income Tax Act, 1961 as well as the India Netherlands DTAA. Taxability of dividend income @10% earned from the Indian subsidiaries: The argument of the Assessee revolves principally around members of OECD of third country and a beneficial rate of tax at the time of application of MFN being sufficient to afford a reduced rate of taxation. Para 4(2) of the India Netherlands Protocol reads as follows: If after the signature of this convention under any Convention or Agreement between India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interests, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate or scope provided for in this Convention on the said items of income, then as from the date on which the relevant Indian Convention or Agreement enters into force the same rate or scope as provided for in that 7 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV Convention or Agreement on the said items of income shall also apply under this Convention. The Netherlands tax authorities have officially notified taxpayers that the beneficial rate of 5% is applicable on their receipt of dividend income from Indian companies. In this regard it is instructive to mention the circular 3 of 2022 wherein the CBDT has disagreed with the interpretation adopted by other tax jurisdiction regarding the applicability of MFN provisions. It is a domestic requirement in India under sub-section (1) of section 90 of the Income-tax Act, 1961 that DTAA or amendment to DTAA are implemented after its notification in the Official Gazette. In the famous case of Azadi Bachao Andolan (2004, 10 SCC) as well, Hon'ble Supreme Court of India has observed that the DTAA provisions come into force on the date of issue of notification of such DTAA. Hon'ble Supreme Court also made it clear in the judgment that the beneficial provision of sub-section (2) of section 90 springs into operation once the notification is issued. Clarificatory circular by the CBDT: The CBDT has issued the Circular in light of several representations received, seeking clarity on the applicability of the MFN clause. The Circular provides that benefit of lower rate and restricted scope under MFN clause will be extended only when all the below conditions are satisfied cumulatively: • India's DTAA with the country which has beneficial lower rate or restricted scope (referred as the third State) is entered into after the signature/entry into force, depending on language of MFN Clause, of India's DTAA. • The third State has to be an OECD member at the time of signing its treaty with India. • India limits its taxing rights in relation to rate or scope of taxation in its treaty with the third State. • India issues a separate notification under the Income Tax Laws (ITL) for importing the favourable benefits of third State treaty into the original treaty. 8 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV An analysis of court decisions makes it clear that the judicial consensus in India has been that section 90 is specifically intended to enable and empower the Central Government to issue a notification for implementation of the terms of a double taxation avoidance agreement. When that happens, the provisions of such an agreement, with respect to cases to which where they apply, would operate even if inconsistent with the provisions of the Income-tax Act. If it was not the intention of the legislature to make a departure from the general principle of chargeability to tax under section 4 and the general principle of ascertainment of total income under section 5 of the Act then there was no purpose in making those sections \"subject to the provisions of the Act\". The very object of grafting the said two sections with the said clause is to enable the Central Government to issue a notification under section 90 towards implementation of the terms of the DTAs which would automatically override the provisions of the Income- tax Act in the matter of ascertainment of chargeability to Income tax and ascertainment of total income, to the extent of inconsistency with the terms of the DTAC. Section 90 of the Income Tax Act: Section 90, which delegates powers to the Central government, has not been challenged and as such, the court proceeded on the footing that the section is constitutionally valid. The section 90 enables the Central Government to enter into a DTAC with the foreign government. When the requisite notification has been issued thereunder, the provisions of sub- section (2) of section 90 spring into operation and an Assessee who is covered by the provisions of the DTAC is entitled to seek benefits there under, even if the provisions of the DTAC are inconsistent with the provisions of Income-tax Act 1961. No selective import of concessional rates under MFN clause, conditions required to be satisfied for availing concessions: The Circular issued by the CBDT essentially restricts the scope of the MFN clause and provides that the benefit of lower tax rate will be extended only when all of the following conditions are satisfied: 9 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV a. The second treaty (with the third State) is entered into after the signature of entry into force (this depends upon the language of the MFN clause of subject DTAA) of the treaty between India and the first State. b. The second treaty is entered into between India and a State which is a member of the OECD at the time of signing the treaty with it. C. India limits its taxing rights in the second treaty in relation to rate or scope of taxation in respect of the relevant items of income. This implies that the terms of this other treaty are more beneficial to the Assessee. d. A separate notification must be issued by the Indian Government, Imparting the benefits of the second treaty into the treaty with the first State, as required by the provisions of sub-section (1) of section 90 of the Income-tax Act, 1961. These conditions are not met in the case of the Assessee, as much as compliance to the condition of issuance of the separate notification was not satisfied. Stand of the AO: The Ld. AO has rejected the claim of Applicant in respect to taxation of its dividend income at lower rate of 5% in place of 10%. The Ld. A.O. has held that the Protocol of India DTAA Netherlands read with India- Slovenia/Lithuania/Columbia DTAAS would not have automatic application. The Assessing Officer has resorted to the clarification made as per Circular No.3/2022 of 03.02.2022 issued by CBDT and has proposed taxation of the dividend income 10% as per Article 10 (Dividends) of India-Netherlands DTAA in the Draft Assessment Order. Understanding MFN Clause: India has entered into DTAA's having an MFN clause with various countries. The Protocol to the DTAA's with said countries ('relevant DTAA') provide that if under any DTAA between India and a third State ('subsequent DTAA'), India limits its taxation to a lower rate or a more restricted scope than the rate or scope provided in the relevant DTAA, the same rate or scope as is applicable in the subsequent DTAA shall also apply under the relevant DTAA. 10 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV MFN clause is usually found in Protocols and Exchange of Notes to DTAAS. Once this clause is part of a treaty, the residents of contracting states get equal treatment as is being given to resident of other (third) states. The intention of MFN clause in tax treaties is by granting of lower rate on specified income and/or; restricting the scope of income and/or; other benefit in terms of allowance of expenses in case of business income MFN clause, as forming part of protocol, is an integral part of the tax treaty. A typical MFN clause in any Indian DTAA reads as under (reproduced from Protocol IV(2) of the India-Netherlands treaty- \"If after the signature of this convention under any Convention or Agreement between India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interests, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate or scope provided for in this Convention on the said items of income, then as from the date on which the relevant Indian Convention or Agreement enters into force the same rate or scope as provided for in that Convention or Agreement on the said items of income shall also apply under this Convention.\" Conditions Stipulated in Circular No. 3/2022 has been clarified that the applicability of the MFN clause and benefit of the lower rate or restricted scope of source taxation rights in relation to certain items of income (such as dividends, interest income, royalties, Fees for Technical Services, etc.) provided in India's DTAA with the third states (OECD Member) will be available to the treaty with an MFN clause (treaty with the first state) only when all the four conditions are met. Most Favoured Nation (MFN)- final adjudication of the issue by the Hon'ble SC: The Hon'ble SC has examined the MFN clauses of India Netherlands, India France and India - Switzerland treaties. It primarily clarified points related to 1. The need for a notification u/s. 90(1) of the Income Tax Act 1961 (the Act) for availing the benefit of MFN and to give effect to the 11 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV treaty or its protocol changing the terms and conditions that alter the existing provisions of the law. 2. The relevant date for another state to be a member of OECD. On 19 October 2023, the Indian Supreme Court (SC) pronounced a significant ruling on the applicability of Most Favoured Nation (MFN) clause found in some of India's tax treaties as under: • The SC ruled that to give effect to a tax treaty or any Protocol changing its terms or conditions, which has the effect of altering the existing provisions of law, notification under Section 90(1) of the Indian Tax Laws (ITL) is mandatory. With reference to MFN clause already agreed to as part of an existing treaty, the beneficial provisions entered with third country cannot be made automatically applicable unless a notification is issued. • The SC held that the beneficial treatment agreed with a third country can be applied by invoking the MFN clause, only if the third country was a member of Organisation for Economic Co- operation and Development (OECD), at the time of signing its tax treaty with India. • India's tax treaties with certain OECD countries include an MFN clause, which provides that if after the original treaty (with the \"first country\") has entered into force, India enters into a tax treaty with an OECD member third country that provides a beneficial tax rate or restrictive scope for taxation of dividends, interest, royalties, etc., India must accord a similar benefit to the first country. • The Indian Constitution enables the Indian Government to enter into international treaties; however, the treaty must be enacted by law or through legislation for it to be binding on Indian nationals if it restricts or affects the rights of citizens or others or modifies the law of India. • The Indian Government, in the past, has followed the practice of expressly issuing notification under Section 90 of the ITL to give effect to the MFN clause of the original country when a 12 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV subsequent tax treaty results in a more beneficial arrangement with a third country. • The interpretation and integration of treaties into domestic law are influenced by constitutional and political factors specific to each signatory. Domestic courts cannot approach treaty interpretation by merely applying blackletter law (i.e., well- established legal rules that are certain and no longer disputable). • As a binding SC decision, the ruling may impact all pending assessments and related proceedings irrespective of the stage of the particular dispute. It may be necessary to assess the potential effects of the SC decision on previous tax positions taken by taxpayers and withholding agents. It may be noted that India has not issued any notification importing the benefit of treaties with Slovenia, Lithuania and Colombia to treaties with the Netherlands, France or the Swiss Confederation. Summary of submission: In view of the above legal position as held by the Hon'ble SC, it is submitted that the applicability of the MFN clause and benefit of the lower rate or restricted scope of source taxation rights in relation to certain items of income (such as dividends, interest income, royalties, Fees for Technical Services, etc.) provided in India's DTAAS with the third States will be available to the first (OECD) State only when all the following conditions are met: (i) The second treaty (with the third State) is entered into after the signature/Entry into Force (depending upon the language of the MFN clause) of the treaty between India and the first State; (ii) The second treaty is entered into between India and a State which is a member of the OECD at the time of signing the treaty with it; (iii) India limits its taxing rights in the second treaty in relation to rate or scope of taxation in respect of the relevant items of income; and (iv) A separate notification has been issued by India, importing the benefits of the second treaty into the treaty with the first State, as 13 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV required by the provisions of sub-section (1) of Section 90 of the Income Tax Act, 1961. If all the conditions enumerated in Paragraph 5(i) to (iv) are satisfied, then the lower rate or restricted scope in the treaty with the third state is imported into the treaty with an OECD State having MFN clause from the date as per the provisions of the MFN clause in the DTAA, after following due procedure under the Indian tax law. In the present case, condition mentioned at (iv) has not been satisfied. In a landmark judgment, the Division Bench of the Hon'ble Supreme Court (SC) on 19 October 2023 in the case of Nestle SA, ruled in favour of the Revenue certain aspects related to the Most Favoured Nation (MFN) clause in the tax treaties. In view of the above detailed written submission, the assessment order needs to be upheld” 5. It is noted that the assessee had invoked MFN clause under India Netherlands protocol which reads as under: If after the signature of this convention under any Convention or Agreement between India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interests, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate or scope provided for in this Convention on the said items of income, then as from the date on which the relevant Indian Convention or Agreement enters into force the same rate or scope as provided for in that Convention or Agreement on the said items of income shall also apply under this Convention. 5.1 The contention of the assessee is that as per the MFN clause of India Netherlands DTAA as reproduced above, the protocol reference to Article 10 of India Slovania DTAA should be read into India Netherlands DTAA. From the records it is clear that, the assessee seeks to invoke Protocol with reference to Article 10 of India Slovenia DTAA, since taxability of dividend is more restrictive whereby the dividend paid by the Indian company 14 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV shall be taxable in the hands of the shareholders at the rate of 5% of gross dividend. 5.2 This issue is no longer res integra by virtue of decision of Honble Supreme Court in case of AO vs. Nestle SA reported in (2023)155 taxmann.com 384 affirmed by Honble Supreme Court reported in (2024) 165 taxmann.com 334.Releveant observation of Hon’ble Supreme Court are as under: 46. The legal position discernible from the previous discussion, therefore is that upon India entering into a treaty or protocol does not result in its automatic enforceability in courts and tribunals; the provisions of such treaties and protocols do not therefore, confer rights upon parties, till such time, as appropriate notifications are issued, in terms of Section 90(1). 47. The various DTAAs, their relative Protocols and the date(s) of their notification under section 90 of the Income-tax Act, based on the submissions of parties, and the materials placed on the record, are summarized in a tabular chart: SUMMARIES OF DTAAs, PROTOCOLS & NOTIFICATIONS IN TABULAR FORMAT ………… C. The interpretation of the term \"is\" 48. The High Court had interpreted the term \"is\" occurring in the DTAAs [see clause IV(2)9 of the India-Netherlands DTAA - the other two clauses in relation to France and Switzerland being similar], which according to it \"describes a state of affairs that should exist not necessarily at the time when the subject DTAA was executed but when a request is made by the taxpayer or deductee for issuance of a lower rate withholding tax certificate under section 197 of the Act. The word 'is'- is both autological and heterological. An autological word is one that expresses the property that it possesses. Opposite of that is a heterological word, i.e., it does not describe itself\". According to that interpretation of 'is, when the request for parity is made by a party seeking aid of the DTAA and the Protocol containing a \"same treatment\" or in other words, a pull in clause, the court has to consider whether at that time the third party state is enjoying better benefits. Integral to this interpretation is whether the \"is a member\" means the present tense, which is that the third party state should be a member of OECD when it enters into DTAA with India. This is relevant, because the India-Lithuania DTAA was signed on 26-7-2011; and notified on 25-7-201210. The date of membership of Lithuania into OECD was 5-7-2018. The India-Colombia DTAA was signed on 13-5-2011; its date of Notification was 23-9-2014. Colombia was admitted to membership of OECD on 28-4-2020. Slovenia signed a DTAA with India on 13-1-2003; this was notified on 31-5- 15 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV 2005, and Slovenia became a member of OECD on 21-7-2010. An amending Protocol was entered into, between India and Slovenia, on 16-5-2016, which was notified on 27-10-2017. 49. Thus, in all three cases, the three \"third party\" nations: Lithuania, Colombia and Slovenia, were initially not members of OECD when they entered into treaties and protocols with India; they became members later. ………… 51. From the above discussion, it is clear that the expression \"is\" has a present signification and it derives meaning from the context. Given this interpretation, the conclusion is that when a third-party country enters into DTAA with India, it should be a member of OECD, for the earlier treaty beneficiary to claim parity. 5.3 The DTAA which India entered into with the Kingdom of Netherlands, was signed on 13-7-1988. DTAA with Slovenia was on 13/01/2003, DTAA Entry into Force was in 17/02/2005, Date of Notification was on 31/05/2005 and Slovenia became an OECD member on 21/07/2010. Thus as the necessary requirements to claim benefit of MFN clause does not get satisfied, we do not find any merit in the case of the assessee. The addition made by the Ld.AO thus stands confirmed. Accordingly, grounds raised by the assessee stands dismissed. In the result the appeal filed by the assessee stands dismissed. Order pronounced in the open court on 28/02/2025. Sd/- Sd/- (RENU JAUHRI) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 28/02/2025 Poonam Mirashi/Dragon Stenographer Copy of the order forwarded to: 16 ITA No.4813/Mum/2023; A.Y. 2021-22 Loparex Holding BV (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt.Registrar) ITAT, Mumbai "