DIRECT TAX LAWS TAX ISSUES IN THE HANDS OF AN AOP 2. Same have been shown in the Table below: Tax Residency and Taxability of an AOP Deduction of expe
|
|
- Buddy McKenzie
- 6 years ago
- Views:
Transcription
1 DIRECT TAX LAWS Vodafone Hangover - Taxability of offshore transactions in India SILVIA RAJPAL CA INTRODUCTION 1. A joint venture is one of the most widely used vehicles of commerce which can be categorized mainly either as an incorporated joint venture or as an unincorporated joint venture. In case of an incorporated joint venture the shares of the JV are held by its members and it is treated as any other incorporated company for the purpose of taxation. On the contrary, an unincorporated JV has no legal existence. Parties create a consortium and enter into inter-party agreements to jointly bid for the works and give it the characteristic of a turnkey contract. The contracts are awarded to the consortium considering the technical skills and competence of its members to undertake the work. The members hold defined rights and obligations in the consortium agreement which specifies, inter alia, the role of each member in the consortium. A consortium of members meeting essential characteristics is granted an independent status under the Income Tax Act, 1961 ( the Act ) and treated as an Association of Persons ( AOP ). There is no specific definition of an AOP under the Act. However, section 4 of the Act imposes tax on income earned by a person in the previous year. Further, section 2(31)(v) of the Act includes an AOP in the definition of a person. There has been prolonged uncertainty and ambiguity on whether the unincorporated JVs and consortiums would be treated as AOPs. In this connection an advance ruling presented on March 20, 2012 in the case of Linde AG, Linde Engineering Division [2012] 19 taxmann.com 238 (AAR- New Delhi), has sought guidance in terms of relevant factors and circumstances when unincorporated JV or a consortium shall be treated as an AOP. Prior to the analysis of the aforesaid ruling, it may be pertinent to mention the tax issues in the hands of an AOP. May 1 to 15, 2012 u TAXMANN S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 19 17
2 DIRECT TAX LAWS TAX ISSUES IN THE HANDS OF AN AOP 2. Same have been shown in the Table below: Tax Residency and Taxability of an AOP Deduction of expenses Minimum Alternate Tax Set off and carry forward of losses As per section 6(4) of the Act, an AOP shall not be treated as a resident in India only if the control and management of its affairs is wholly outside India during the year. The presence of non-residents in the consortium would not automatically lend the non-residential status to the AOP. In case an AOP qualifies as an Indian tax resident, the worldwide income of AOP shall be subject to tax in India. The contract shall not be dissected 1 for the tax purposes and even the offshore transactions shall fall within the tax net. Further, the usual treaty benefits are also not available to the non-residents. The profits of an AOP are taxed on net income basis as per the provisions of the Act. However, section 40(ba) of the Act imposes restrictions on allowability of payments made towards interest on loan or capital, salary, bonus, commission or remuneration made by an AOP to its constituent members. The intent of imposition of the aforesaid restriction is the prevention of reduction of tax liability of an AOP by siphoning off its income given to its members. MAT provisions are not applicable to an AOP. However, the aforesaid provisions may be applicable in determining the taxable profits of their members. As per section 167B, read with section 86 of the Act, the share of member shall not be included in the total income in case the AOP is taxed at maximum marginal rate or at any higher rate. On the contrary, the share of member would be considered while computing book profits of the member companies. This would lead to double taxation of same income in two hands, i.e., AOP as well as the member companies. As per the provisions of the Act, business losses are allowed to be carried forward and set off for 8 years. Unabsorbed depreciation can be carried forward indefinitely for any number of years. In case of an AOP, business loss and unabsorbed depreciation can be carried forward only in the hands of an AOP. Its members cannot claim the benefit of carry forward and set off of the losses incurred by an AOP against their other business income. 2.1 Critical examination of these factors - Understanding the repercussions of a consortium qualifying as an AOP, as mentioned in the table above, critical examination of the factors and circumstances which would lead to an unincorporated JV/a consortium to be an AOP is very important. As mentioned supra, the analysis of the Advance Ruling in the case of Linde AG, Linde Engineering Division (supra) would help in determining such factors and bring clarity to the picture of formation of an AOP. 3. ANALYSIS OF AAR S RULING IN THE CASE OF LINDE AG, LINDE ENGINEERING DIVISION 3.1 Key Issue before AAR - It is pertinent to bear in mind that the key issue before AAR was the taxability of offshore activities in India. 3.2 Key Facts of the Case before AAR Formation of the consortium - The applicant, Linde Engineering Division, Germany formed a consortium with Samsung Engineering 18 May 1 to 15, 2012 u TAXMANN S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 20
3 Company Ltd., Korea ( Samsung ) to take up the work being awarded by ONGC Petro Additions Ltd. ( OPAL ) for the designing, engineering and installation of a plant on a lump sum turnkey basis Parties liable jointly and severally - Both the parties, i.e., the applicant and Samsung entered into the Memorandum of Understanding ( MOU ) followed by the Internal Consortium Agreement ( ICA ) separating their area of operations and responsibilities. The payment was also agreed to be made separately to each member based upon the allocated work. The parties were liable jointly and severally for the obligations of the project with reference to the specified terms and conditions Model followed by Consortium - The model followed by the consortium was very simple. The allocation of work to its constituent members was done based on their area of expertise. The payment was also made by OPAL directly to the members of the consortium for the work performed by each of them. Following is the diagrammatical representation of its Modus Operandi: AAR s ruling sought on two aspects of taxation in India - The applicant approached AAR, to seek ruling on the following matters: (i) Whether the applicant and Samsung are taxable in the status of an AOP under the Act? (ii) Whether the payment received in respect the offshore transactions would be taxable in India? 3.3 Applicant s Contentions Consortium as a divisible contract - The contract entered into between OPAL and the consortium was a divisible contract which identified the terms of scope of work, obligation of the members of consortium and the consideration payable directly to each member Consideration for offshore transactions not taxable - The contract could be split into separate parts following the decision of Ishikawajama Harima Heavy Industries Limited v. DIT 2 and, thus, the consideration for offshore transactions was not taxable in India Expenses incurred by each member - The expenses were exclusively incurred by each member for the part of the work performed by that member. May 1 to 15, 2012 u TAXMANN S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 21 19
4 DIRECT TAX LAWS Issues not involved in the case - The sharing of the profits and losses, the assets, capital employed or resources were not involved Title to machinery in off-shore area - The title to machinery supplied by the applicant to OPAL had passes off in the off-shore area. 3.4 Revenue s Contentions Contract a lump-sum turnkey contract - The Revenue contended that the contract was a lump sum turnkey contract and was indivisible. A contract had to be read as a whole to understand its purport and effect. Therefore, the income of the non-resident by way of royalty/ fee for technical services would be deemed to have accrued or arisen in India and, thus, had to be included in the total income of nonresident, even if the services of the non-resident were not rendered in India AAR s observations and ruling Consortium jointly and severally liable - AAR observed that the Consortium was jointly and severally liable to perform its obligations. The performance guarantee was also furnished by bank on behalf of the consortium. Further, it was observed that by setting aside the payments member-wise could not alter the nature of the contract in the context of the tender and the work undertaken Splitting-up the contract would be artificial - AAR held that the aforesaid contract for erection and commissioning of plant also includes delivery of design and machinery. The risk is retained even beyond the delivery of the equipment, i.e., up to trial, commissioning and acceptance of the project, unlike the sale of goods contract. It was further held that any splitting up of the aforesaid contract, considering the sale of goods separate from obligation undertaken for erection and commissioning, would be artificial Approach must be to understand the nature and object of contract - The AAR relied on the Supreme Court s judgment in Vodafone International Holdings B.V. v. Union of India [2012] 17 taxmann.com 202 wherein it was held that it is the task of the Revenue/Court to ascertain the legal nature of the transaction and while doing so, it has to look at the transaction as a whole and not to adopt a dissecting approach. Therefore, a dissecting approach from the angle of taxation should not be resorted to and the approach must be to understand the nature and the object of the contract by looking at the transaction Situs of the contract - AAR held that the fact of offshore supply of design or machinery alone could not be the driver to determine the situs of the contract. Rather, the situs of the erection contract had to be determined on the basis of the site where the plant was to be erected. Since the contract was signed in India, it was held that the situs of the contract was in India. Further, it was held that the sale of machinery and designing of the project and equipment could not be treated as offshore transactions. Therefore, taxing the aforesaid was not beyond the jurisdiction of the Indian Revenue authorities No mention of off-shore/on-shore supply - AAR also considered the Revenue s contention that the contract did not specify that title to the machinery shall pass on to OPAL on high seas or in the country of origin. There was no mention of off-shore or on-shore supply of services Main purpose of the MoU other than to supersede nature of contract - AAR also held that ICA cannot be referred to interpret the contract or rights and obligations thereunder. It was merely an internal arrangement between the members of the consortium and even OPAL was not a party to it. Further, the purpose of the MoU was merely to bid for and secure the contract. Therefore, MoU could not be understood to supersede the nature of the contract. The segregation of the duties and the payment for the work done by each member would not dislodge the legal position of formation of AOP. 20 May 1 to 15, 2012 u TAXMANN S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 22
5 CONCLUSION 4. AAR concluded that AOP was formed based upon various judicial precedents 4. After considering the above mentioned reasons along with the fact that two entities came together as a consortium with a common object of bidding for work, AAR ruled that responsibility was that of the consortium for establishment of the project and the members carried joint liability which continued after installation and even after commissioning. 5. KEY DO S AND DON TS - POST LINDE - CONSORTIUM AGREEMENT* S.No. Do s Don ts 1. Contract must be a divisible contract backed Contract should not be a consolidated contract with by ample justification for splitting up the a consolidated price. contract and not merely for tax consideration. 2. The role and responsibility of the members The obligation for performance of the contracts of the consortium should be clearly should not be a joint liability. In case of joint and demarcated. several liability of the members, a member who makes up for any contractual defaults should have right to be indemnified by the defaulting member. 3. Scope of work and the payments for the A lump sum contract amount for the entire work work done should be clearly demarcated. should not be agreed to. The members should indeed be directly paid, for the work performed by each of them. 4. Performance guarantee should be issued by Performance guarantee should not be issued by the members of the consortium for their bank on behalf of the consortium. respective work under the contract. 5. Title to offshore supply of equipments It should be specified that the title to machinery should pass outside India. shall pass on to the company awarding the contract on high seas or in the country of origin. 6. Relationship between parties and the object Relationship between parties and the object of the of the consortium should be specified to be consortium should not be to conduct business mutual cooperation for execution of the together. contract. *Subject to commercial viability 1. Vodafone International Holdings BV v. UOI [2012] 341 ITR 1/17 taxmann.com 202 (SC) 2. [2007] 288 ITR 408/158 Taxman 259 (SC) 3. Explanation to section 9(2) of the Act 4. CIT v. Indira Balkrishna [1960] 39 ITR 546 (SC); G. Murugesan & Brothers v. CIT [1973] 88 ITR 432 (SC); Hyundai Rotem Co., Korea/Mitsubishi Co., Japan, In re [2010] 323 ITR 277/190 Taxman 314 (AAR - New Delhi) May 1 to 15, 2012 u TAXMANN S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 23 21
Delhi High Court holds on the taxability of offshore and onshore supply and services under the composite contract
KPMG FLASH NEWS KPMG IN INDIA Delhi High Court holds on the taxability of offshore and onshore supply and services under the composite contract 29 April 2014 Background Recently, the Delhi High Court in
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI. PRESENT Mr Justice P.K. Balasubramanyan (Chairman) Mr. V.K.
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI 20 th Day of March, 2012 PRESENT Mr Justice P.K. Balasubramanyan (Chairman) Mr. V.K. Shridhar (Member) A.A.R. No.962 of 2010 Name & address
More informationSharing insights. News Alert 30 April 2014
www.pwc.in Sharing insights News Alert 0 Delhi High Court rules on constitution of an Association of Persons (AOP) and the taxability of offshore supplies and services in a turnkey contract In brief The
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI. Mr Justice P.K. Balasubramanyan (Chairman) A.A.R. No.
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI 7 th Day of June, 2012 PRESENT Mr Justice P.K. Balasubramanyan (Chairman) A.A.R. No. 958 of 2010 Name & address of the applicant : Alstom
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI. A.A.R. No.977 of 2010 PRESENT RULING
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI 7 th Day of May, 2012 A.A.R. No.977 of 2010 PRESENT Justice Mr. P.K.Balasubramanyan (Chairman) Name & address of the applicant Present for
More informationEY Tax Alert. Executive summary. Delhi HC rules on AOP constitution and taxability of offshore supply and services. 28 April 2014
28 April 2014 EY Tax Alert Delhi HC rules on AOP constitution and taxability of offshore supply and services Executive summary Tax Alerts cover significant tax news, developments and changes in legislation
More informationInternational Taxation: Recent Controversies & Jurisprudence
WIRC of ICAI International Taxation: Recent Controversies & Jurisprudence September 15, 2012 CA Jiger Saiya CASE STUDIES DISCUSSED Turnkey Contracts Buyback of Shares Attribution of Profits to Dependent
More informationMembers of a consortium formed to bid and execute a project together cannot be treated as an Association of Persons
Tax & Regulatory Services News Alert* 1 April, 2010 Members of a consortium formed to bid and execute a project together cannot be treated as an Association of Persons Background The Authority of Advance
More informationTDS on payments to non-residents
TDS on payments to non-residents 291 ITR (Jour.) 18 (Part-5) -S.K. Tyagi 1 Of late, it has been observed that with the growth of the economy of the country the number of transactions of the tax-payers
More informationThe applicant was to design the curtain wall and façade, supply all materials, erect, install, inspect, test and commission the entire subcontract
from India Tax & Regulatory Services Offshore supplies held on facts to be taxable in India in case of composite contract for supplies and services; supply transaction not completed outside India September
More informationVodafone Judgement: Guide To Law Laid Down By The Supreme Court
Vodafone Judgement: Guide To Law Laid Down By The Supreme Court In Vodafone International Holdings B.V. vs. UOI the Supreme Court has laid down several important and far-reaching principles of law on tax
More informationSharing insights. News Alert 23 August, 2012
www.pwc.com/in Sharing insights News Alert 23 August, 2012 For attribution of profits to PE, AO cannot simply apply Rule 10 without rejecting TP study for proper reasons In brief The taxpayer, a project
More informationResidential Status, Scope Of Total Income Under Income Tax, and Foreign Tax Credit
1 KARTHIK RANGANATHAN ASSOCIATES Residential Status, Scope Of Total Income Under Income Tax, and Foreign Tax Credit Seminar on NRI Taxation ICAI SIRC, Chennai April 29, 2017 Karthik Ranganathan Tax and
More informationDiscussion on Place of Effective Management
Discussion on Place of Effective Management CA Vishal Palwe WIRC Seminar on Discussion on Select Issues in International Taxation 10 June 2017 Residential status of company CA Vishal Palwe Discussion on
More informationCONCEPT OF RESIDENCE. Seminar on Basics of International Taxation. Date : 5 th September 2014
CONCEPT OF RESIDENCE Seminar on Basics of International Taxation SIRC of ICAI Date : 5 th September 2014 1 Particulars Section Resident RNOR Non- Resident Income received in India Sect 5 IncomeAccruing
More informationWHITE PAPER - WHETHER NON-RESIDENT FOREIGN COMPANIES ARE REQUIRED TO FILE RETURN OF INCOME IN INDIA.
WHITE PAPER - WHETHER NON-RESIDENT FOREIGN COMPANIES ARE REQUIRED TO FILE RETURN OF INCOME IN INDIA www.rsmindia.in 1.0 BACKGROUND 1.1 Taxation of non-residents has been a vexed issue for a long time.
More informationSlump Sale, MAT and AMT
Special Story CA Haresh Kenia Slump Sale, MAT and AMT Introduction The Income-tax Act provides for the requirement of audit report and certification from Accountants under various provisions of the Act
More informationMay WHAT'S INSIDE... Direct Tax Transfer Pricing Indirect Tax
May 01-15 WHAT'S INSIDE... Direct Tax Transfer Pricing Indirect Tax What s inside DIRECT TAX 1. Stock Appreciation Rights taxable as perquisites, even if received from parent company 2. Offshore supply
More informationFacts of the case. Background. 19 January 2018
19 January 2018 Payment for offshore supply of an equipment is not taxable in India, whereas, supervisory services for installation of such equipment are taxable in India Background Recently, the Authority
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI
BEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI 29 th Day of January, 2018 A.A.R. No 1217 of 2011 PRESENT Mr. R.S. Shukla, In-charge Chairman Mr. Ashutosh Chandra, Member (Revenue) Name & address of
More informationVAN OORD ACZ. BV, IN RE
Page 1 of 10 CTR ENCYCLOPAEDIA ON INDIAN TAX LAWS VAN OORD ACZ. BV, IN RE AUTHORITY FOR ADVANCE RULINGS Suhas C. Sen, J., Chairman; Dr. (Mrs.) Mohini Bhussry & Shiv Prakash, Members A.A.R. No. 469 of 1999
More informationOverview of Taxation of Non Residents
Overview of Taxation of Non Residents CTC Vispi T. Patel Vispi T. Patel & Associates 13 th December, 2013 Scheme of Taxation for Non Residents under Income-tax Act, 1961 Section 4 (Charge of Income-tax)
More informationANALYSIS OF SUPREME COURT JUDGMENT IN VODAFONE INTERNATIONAL. Ashok Pandit & Co.
1 ANALYSIS OF SUPREME COURT JUDGMENT IN VODAFONE INTERNATIONAL FACTS Seller Hutchison Telecommunications Cayman Island Company Buyer Vodafone International BV Dutch Company (Assessee) CGP Investments Cayman
More informationSharing insights. News Alert 21 August, 2012
www.pwc.com/in Sharing insights News Alert 21 August, 2012 Transfer pricing, minimum alternate tax and filing of return applicable to capital gains earned by foreign company eligible for exemption under
More informationSharing insights. News Alert 8 August, 2012
www.pwc.com/in Sharing insights News Alert 8 August, 2012 Capital gains on direct and indirect transfer of shares of Indian company by Mauritius tax resident not taxable in India under the India-Mauritius
More information$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C) 5818/2013. versus THE AUTHORITY FOR ADVANCE. With + W.P.(C) 7788/2013 & CM 16560/2013
$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 12-18. + W.P.(C) 5818/2013 HYOSUNG CORPORATION... Petitioner Through: Mr.Deepak Chopra, Mr. Amit Srivastava and Ms. Manasvini Bajpai, Advocates. versus THE
More informationGains arising in the hands of Mauritian company from sale of equity shares and CCDs of an Indian company are not taxable as interest income in India
KPMG FLASH NEWS KPMG IN INDIA Gains arising in the hands of Mauritian company from sale of equity shares and CCDs of an Indian company are not taxable as interest income in India 5 August 2014 Background
More informationCA. Jayesh Thakur, PricewaterhouseCoopers 1
Saturday, 22 LLP Taxation & Structuring of an Entity as WIRC ICAI 22 October, 2011 Jayesh Thakur WIRC Objective 2 Agenda Evolution of LLP in India Key Provisions of LLP in India Taxation of LLPs Migration
More informationT.P.OSTWAL BOMBAY CHARTERED ACCOUNANTS SOCIETY
T.P.OSTWAL BOMBAY CHARTERED ACCOUNANTS SOCIETY CONTROL AND MANAGEMENT MORGAN STANLEY S.C. KOTAK MAHINDRA PRIMUS CARGO COMMUNITY NETWORK (INDIA PE- DOES NOT PLAY ANY ROLE PE- PLAYS ROLE RECENT JUDICIAL
More informationBefore the Authority for Advance Rulings (Income-tax) New Delhi
Before the Authority for Advance Rulings (Income-tax) New Delhi 28 th Day of March, 2011 Present Mr. Justice P.K.Balasubramanyan (Chairman) Mr. J. Khosla (Member) Mr. V.K. Shridhar (Member) AAR No. 871
More informationR U L I N G (By Mr. Justice Syed Shah Mohammed Quadri)
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI ========== P R E S E N T Hon ble Mr. Justice Syed Shah Mohammed Quadri (Chairman) Mr. K.D. Singh (Member) Monday, eighteenth October two
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI
BEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI 29 th Day of January, 2018 A.A.R. No 1299 of 2012 PRESENT Mr. R.S. Shukla, Incharge-Chairman Mr. Ashutosh Chandra, Member (Revenue) Name & address of
More informationIs Ware House Agent A PE??
DIVAKAR VIJAYASARATHY & ASSOCIATES Is Ware House Agent A PE??. Divakar Vijayasarathy 10 Does Demarcated Space in a Warehouse constitute a PE?? The term permanent establishment has been the subject of matter
More informationWithholding taxes on cross-border payments A conundrum? Ernst & Young Webcast Held on 10 February 5.00 p.m. (IST)
Withholding taxes on cross-border payments A conundrum? Ernst & Young Webcast Held on 10 February 2010 @ 5.00 p.m. (IST) Contents Background Key issues/ challenges Karnataka High Court ruling Technical
More informationCase Studies on Permanent. Attribution of Profits. By Sunil Moti Lala. Partner & National Head Tax Litigation & Controversies (DT & TP) Advaita Legal
Case Studies on Permanent Establishment including Attribution of Profits By Sunil Moti Lala Advocate Partner & National Head Tax Litigation & Controversies (DT & TP) Advaita Legal Case Study III US India
More informationAccounting and Tax. SAFA Countries. CA Nihar Jambusaria & CA Sanjiv Chaudhary. 5 th June 2014
Accounting and Tax SAFA Countries CA Nihar Jambusaria & CA Sanjiv Chaudhary 5 th June 2014 Contents 1 Accounting & Tax aspects of SAFA Countries 2 Divergent Principles of Accounting and Taxation 3 Goodwill-Treatment
More informationC h a l l e n g e U s
C h a l l e n g e U s Firm and Limited Liability Partnership Association of Person May 27, 2016 Chennai Overview of Tax aspects Pranith Golecha and Varatharaj Kumar Silent Features Partnership Firm Persons
More informationINTERNATIONAL TAXATION Case Law Update
Advocate INTERNATIONAL TAXATION Case Law Update A. HIGH COURT JUDGMENTS 1. Even if TNMM is found acceptable as regards all other transactions, it is open to the TPO to segregate a portion and subject it
More informationDIRECT TAX UPDATE. November, Transfer Pricing
November, 2014 1. Transfer Pricing DIRECT TAX UPDATE KNAV is a firm of International Accountants, Tax and Business Advisors. Presence in INDIA USA UK FRANCE NETHERLANDS SWITZERLAND CANADA E: admin@knavcpa.com
More informationTHE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: ITA 612/2012
THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 08.04.2016 + ITA 612/2012 PGS EXPLORATION (NORWAY) AS... Appellant versus ADDITIOANAL DIRECTOR OF INCOME TAX... Respondent Advocates who appeared
More informationINTERNATIONAL TAXATION Case Law Update
CA Tarunkumar Singhal & Sunil Moti Lala, Advocate INTERNATIONAL TAXATION A. SUPREME COURT RULINGS 1. Where the transfer pricing addition made in the final assessment order pursuant to original assessment
More informationIN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX MATTER. Income Tax Appeal No. 1167/2011. Reserved on: 21st October, 2011
IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX MATTER Income Tax Appeal No. 1167/2011 Reserved on: 21st October, 2011 Date of Decision: 8th November, 2011 The Commissioner of Income Tax Delhi-IV,
More informationWorkshop on Practical Problems of Tax Treaty Interpretation and Application
Workshop on Practical Problems of Tax Treaty Interpretation and Application TERMINATION PAYMENTS FOR NON-COMPETE CLAUSE BIJAL AJINKYA Partner, Khaitan & Co Facts Mr A, resident of R, works as a lawyer
More informationIncome from business as computed in the assessment order
SUPREME COURT OF INDIA Cambay Electric Supply Industrial Co. Ltd. v. Commissioner of Income-tax Y.V. CHANDRACHUD, CJ. AND V.D. TULZAPURKAR, J. CIVIL APPEAL NOS. 785 AND 783 OF 1977 APRIL 11, 1978 S.T.
More informationCNK Knowledge Tracker
CNK Knowledge Tracker Be a Step Ahead July 2014 CNK & Associates, LLP Contents Domestic Tax Notification / Circulars 3 Recent judicial decisions 5 International Taxation/Transfer Pricing 11 Recent judicial
More informationA Fresh look at disallowances u/s 14A of Income Tax Act - By CA. K.K.Chhaparia
A Fresh look at disallowances u/s 14A of Income Tax Act - By CA. K.K.Chhaparia Now a days, every assessee who is doing investment or trading in shares are getting hit hard by the impact of section 14A.
More informationPermanent Establishment in India: checking the rule
Permanent Establishment in India: checking the rule The India s Delhi High Court (HC) has recently ruled that outsourcing of services by US company to Indian affiliate does not constitute PE. It is aim
More informationA.A.R. Nos of Mr Justice. P.K. Balasubramanyan (Chairman) Mr. V.K. Shridhar (Member)
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI 26 th Day of July, 2011 A.A.R. Nos. 858-861 of 2009 PRESENT Mr Justice. P.K. Balasubramanyan (Chairman) Mr. V.K. Shridhar (Member) Name &
More informationEY Tax Alert. Executive summary
01 September 2016 EY Tax Alert AAR affirms availability of India-Mauritius treaty benefit on sale of shares of Indian company, distinguishes Bombay High Court ruling of Aditya Birla Nuvo Executive summary
More informationIndia - Advance Rulings on Withholding, Foreign Tax Credits for Nonresident Employees
India - Advance Rulings on Withholding, Foreign Tax Credits for Nonresident Employees India s advance ruling authority has determined that no tax withholding is required on salaries paid by an employer
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI. A.A.R. Nos & 1031 of Present
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI 2nd Day of May, 2011 A.A.R. Nos. 1006 & 1031 of 2010 Present Mr. Justice P.K.Balasubramanyan (Chairman) Mr. J. Khosla (Member) Mr. V.K. Shridhar
More informationTax Bulletin. Vispi T. Patel & Associates. Chartered Accountants. #10, 3rd Floor, Dwarka Ashish Apartment,
Tax Bulletin Vispi T. Patel & Associates Chartered Accountants #10, 3rd Floor, Dwarka Ashish Apartment, Jambul Wadi, Opp. Edward Cinema, Kalbadevi Road, Marine Lines, Mumbai 400 002 Email ID: vispitpatel@vispitpatel.com
More informationtax planning international
tax planning international asia-pacific focus International Information for International Business >>>>>>>>>>>>>>>>>>>>>>>>>>> April 2018 www.b. m Reproduced with permission from Tax Planning International
More informationTHE CHANGING FACE OF SERVICE PERMANENT ESTABLISHMENTS
THE CHANGING FACE OF SERVICE PERMANENT ESTABLISHMENTS Authors Neha Rastogi Stanley C. Ruchelman Tags India Permanent Establishment Physical Presence Place of Performance INTRODUCTION Broadly speaking,
More informationS.R.Dinodia & Co.
Galileo International Vs. DCIT By Pradeep Dinodia LL.B., FCA S.R.Dinodia & Co. http://www.srdinodia.com FACTS OF THE CASE 1. Galileo International Inc. (the 'Appellant'), a resident of USA, is in the business
More information13 Assessment of Various Entities
13 Assessment of Various Entities 13.1 Assessment of Companies 13.1.1 Meaning of Company for purposes of income-tax: Under the Income-tax Act, 1961, the term company has a much wider meaning than what
More informationIn order to answer the aforesaid queries, the following issues will have to be examined :
1 Tax-treatment of the share of a company in the income of an AOP [Published in 351 ITR (Jour) 16] - By S.K.Tyagi Recently, an Opinion was sought by a company relating to the tax-treatment of its share
More informationT A X SCOUT. A quarterly update on recent developments in Taxation Law
T A X SCOUT A quarterly update on recent developments in Taxation Law May 2, 2016 (January 2016 - March 2016) Foreword We are delighted to present to you, the latest issue of the Tax Scout, our quarterly
More informationKey Summary: Delhi HC ruled
Limited (Canada) Nortel NetworksInc (Luxemburg) SA India International Inc. (Taxpayer) International Finance &Holding Key Summary: Delhi HC ruled that offshore supply of equipments neither lead to attribution
More informationAnti-Avoidance Rules Overview and Implications
Anti-Avoidance Rules Overview and Implications By Naman Shrimal General Anti-Avoidance Rule ( GAAR ) is introduced in Finance Bill 2012 by our Finance Minister. The rule, which were part of Direct Tax
More informationIN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX ACT Date of decision: 9th July, 2013 ITA 131/2010
IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX ACT Date of decision: 9th July, 2013 ITA 131/2010 COMMISSIONER OF INCOME TAX... Appellant Through Ms. Suruchi Aggarwal, sr. standing counsel.
More informationMedia & entertainment industry direct tax issues. Prashant Bhojwani 26 November 2016
Media & entertainment industry direct tax issues Prashant Bhojwani 26 November 2016 Key segments 2 Broad overview India has the world s largest film industry in terms of number of films produced 1,500
More informationDirect Tax. March Budget Highlights :
Direct Tax An e-newsletter from Lakshmikumaran & Sridharan, New Delhi, India March 2015 / Issue 8 March 2015 Budget 2015 - Highlights : Test of tax residence by reference to POEM Source rules for foreign
More informationMINIMUM ALTERNATE TAX REGIME
VOL. 19 NO. 12 / JUNE 2016 C.V.O. CA S NEWS & VIEWS MINIMUM ALTERNATE TAX REGIME Contributed by : CA Tejas Gangar a member of the association he can be reached at tejasgangar@gmail.com BACKGROUND Minimum
More informationTHE HIGH COURT OF DELHI AT NEW DELHI
THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 13.05.2013 + W.P.(C) 8562/2007 & CM Nos. 16150/2007 & 17153/2007 MARUTI SUZUKI INDIA LTD... Petitioner versus DEPUTY COMMISSIONER OF INCOME
More informationIN THE ITAT BANGALORE BENCH 'C' A.
IT/ILT : Where on date of purchase of house property from non-resident vendor, assessee was aware of fact that capital gain was not taxable in vendor's hands due to availability of deduction under section
More informationCapital gains exemption available under India- Mauritius tax treaty - Azadi Bachao Andolan decision followed and McDowell decision distinguished
www.pwc.com/in Sharing insights News Alert 16 November, 2011 Capital gains exemption available under India- Mauritius tax treaty - Azadi Bachao Andolan decision followed and McDowell decision distinguished
More informationCORPORATE UPDATE IN THIS ISSUE DIRECT TAX INTERNATIONAL TAXATION TRANSFER PRICING DOMESTIC TAXATION. September, 2018
CORPORATE UPDATE DIRECT TAX INTERNATIONAL TAXATION I. High Court upholds grossing up for withholding tax purpose where taxes are borne by customer on fees for technical services paid to non-resident even
More informationGlobal Tax Alert. India s AAR rules MFN clause cannot be used to benefit from make available clause. Detailed discussion
28 May 2014 EY Library Access both online and pdf versions of all EY Global Tax Alerts. Copy into your web browser: http://www.ey.com/gl/en/ Services/Tax/International- Tax/Tax-alert-library#date India
More informationTDS on Payments to Non-residents under section 195 Law and Procedures
Study Course on International Taxation for Beginners Organised by - Western India Regional Council of the Institute Chartered Accountants of India TDS on Payments to Non-residents under section 195 Law
More informationEPC Contracts Changing landscape and managing risks
KPMG EPC Contracts Changing landscape and managing risks JAYESH KARIYA December 2017 1 The Journey of EPC Contracts 1 Overview of Infrastructure and EPC Contracts 2 EPC Contract Structuring Multi Dimensions
More informationR U L I N G [By Hon ble Chairman]
BEFORE THE AUTHORITY FOR ADVANCE RULINGS(INCOME TAX), NEW DELHI 30 th Day of March, 2009 PRESENT Mr Justice. P.V. Reddi (Chairman) Mr. A. Sinha (Member) Mr. Rao Ranvijay Singh (Member) A.A.R. No. 749 of
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI 10 th Day of August, 2016 A.A.R. No 1017 of 2010 PRESENT Justice Mr V.S. Sirpurkar (Chairman) Mr. A.K. Tewary, Member (Revenue) Mr. R.S.
More informationthe income was received from letting out of the properties, it was in the nature of rental income. He, thus, held that it would be treated as income f
'REPORTABLE' IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4494 OF 2004 M/S CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAI... Appellant VERSUS THE COMMISSIONER OF INCOME TAX
More informationIN THE HIGH COURT OF JUDICATURE AT BOMBAY WRIT PETITION NO.2468 OF 2008
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2468 OF 2008 Cartini India Limited, ) (Formerly Godrej Appliances Ltd. ) Pirojshanagar, Vikhroli (East),
More informationNOTICE INVITING TENDER (NIT)
NOTICE INVITING TENDER (NIT) 1.1 GENERAL 1.1.1 Name of Work: Delhi Metro Rail Corporation (DMRC) Ltd. invites open tenders from eligible applicants, who fulfill qualification criteria as stipulated in
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI RULING
BEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI 28 th Day of November, 2017 A.A.R. No 1232 of 2012 PRESENT Mr. R.S. Shukla,In-chargeChairman Mr. Ashutosh Chandra, Member (Revenue) Name & address of
More informationIN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs OF 2010 (Arising out of SLP(C) No of 2009)
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs.7541-7542 OF 2010 (Arising out of SLP(C) No. 34306-34307 of 2009) GE India Technology Centre Private Ltd.. Appellant(s) Versus
More informationTaxation of Limited Liability Partnership
Taxation of Limited Liability Partnership WIRC SEMINAR ON LLP CA VISHAL PALWE 2 MARCH 2019 Key features of LLP 2 Key features of LLP LLP is governed by Limited Liability Partnership, Act 2008 Features
More informationNotional depreciation not allowable while computing value of assets for wealth tax
Notional depreciation not allowable while computing value of assets for wealth tax A plausible manner in which WDV of an asset, thus, may be reckoned for the purpose of r. 14 is to reduce the depreciation
More informationP.N. BHAGWATI, N.L. UNTWALIA AND S. MURTAZA FAZAL ALI, JJ.
Carborandum Co. v. Commissioner of Income tax SUPREME COURT OF INDIA CIVIL APPEAL NO. 89 OF 1975 APRIL 11, 1977 P.N. BHAGWATI, N.L. UNTWALIA AND S. MURTAZA FAZAL ALI, JJ. Counsels Appeared N.A. Palkhivala,
More informationDelhi Tribunal rules technical assistance constituted Service PE and related fees were effectively connected business profits
1 April 2014 EY Library Access both online and pdf versions of all EY Global Tax Alerts. Copy into your web browser: http://www.ey.com/gl/en/ Services/Tax/International- Tax/Tax-alert-library#date Delhi
More informationIN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES I-2 NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES I-2 NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A. No. 4542/Del/2013 Assessment Year: 2008-09
More informationSharing insights. News Alert 22 April Use of hotel rooms for the purpose of business could result in a permanent establishment. In brief.
www.pwc.in Sharing insights News Alert 22 Use of hotel rooms for the purpose of business could result in a permanent establishment In brief In a recent ruling 1, the Mumbai Income-Tax Appellate Tribunal
More informationINTERNATIONAL TAXATION Case Law Update
CA Tarunkumar Singhal & CA Sunil Lala INTERNATIONAL TAXATION Case Law Update A] AUTHORITY FOR ADVANCE RULINGS I. India Mauritius DTAA Capital Gains Whether if the Mauritian entity is holding a valid tax
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI
BEFORE THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI 7 th Day of February, 2018 A.A.R. No 1200 of 2011 PRESENT Mr. R.S. Shukla,In-chargeChairman Mr. Ashutosh Chandra, Member (Revenue) Name & address of the
More informationINDIA IMPORTANT CORPORATE TAX UPDATES
INDIA IMPORTANT CORPORATE TAX UPDATES Introduction Reducing tax litigation has been a key focus area for the Modi government. Several initiatives have been taken by the Central Board of Direct Taxes (the
More informationPROFESSIONAL PROGRAMME
1 PROFESSIONAL PROGRAMME SUPPLEMENT FOR STRATEGIC MANAGEMENT, ALLIANCES AND INTERNATIONAL TRADE MODULE 3 - PAPER 5 (Relevant for Students Appearing in December, 2015 Examination) Disclaimer- This document
More informationIndia Tax Updates, 2013
India Tax Updates, 2013 International Bar Association Amesur, Hanisha 6/1/2013 India Tax Updates 1. Tax on super-rich The base income-tax brackets for the assessment year (AY) 2014-15 for individuals,
More informationTaxation of Limited Liability Partnership 27 MAY 2017
Taxation of Limited Liability Partnership WIRC SEMINAR ON LLP CA VISHAL PALWE 27 MAY 2017 Key features of LLP WIRC SEMINAR - TAXATION OF LLP - CA VISHAL PALWE - 27 MAY 2017 2 Key features of LLP LLP is
More informationTAX NEWS. HEMANT ARORA & CO. Chartered Accountants. Inside.. Direct Tax. International tax and Transfer Pricing. Domestic tax. February & March 2012
February & March 2012 For private circulation only. Inside.. Direct Tax International tax and Transfer Pricing Office Memorandum -Advisory group, for international taxation and transfer pricing issues,
More informationDiscussion on amendments to Agency PE rules in Budget 2018
Discussion on amendments to Agency PE rules in Budget 2018 Jimit Devani July 2018 Agenda Concept of Permanent Establishment (PE) BEPS Action Plan 7 India budget update Consequence of PE Way forward Recent
More informationH A R B I N G E R. B D Jokhakar & Co. Chartered Accountants October Updates on regulatory changes affecting your business
October 2014 B D Jokhakar & Co. Chartered Accountants www.bdjokhakar.com INDEX Sr. No Topics covered Page No. 1 Company Law 3 2 Reserve Bank of India 4 4 Income Tax 5 5 Service Tax 6 7 Summary of Judgments
More informationTDS under section 195 of the Income-tax Act. CA Vishal Palwe 16 December 2017 Seminar on International Taxation at WIRC
TDS under section 195 of the Income-tax Act CA Vishal Palwe 16 December 2017 Seminar on International Taxation at WIRC Overview of section 195 Overview of section 195 195(1) Any person paying to non-resident
More informationVarying tax perceptions of the Permanent Establishment and the approach of judicial authorities towards them
Varying tax perceptions of the Permanent Establishment and the approach of judicial authorities towards them Radhakishan Rawal December 7, 2018 Option B : 5pm to 7.30pm 1 Formula One World Championship
More informationIncome Computation and Disclosure Standards. CA Parul Mittal
Income Computation and Disclosure Standards CA Parul Mittal ICDS Overview In Finance Act 2014, vide amendment made in section 145(2), power granted to Central Government to notify income computation and
More informationGENERAL EFFECTIVE DATE UNDER ARTICLE 28: 1 DECEMBER 1983 TABLE OF ARTICLES
UNITED STATES TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF AUSTRALIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND
More informationJuly WHAT'S INSIDE... Direct Tax Transfer Pricing Indirect Tax
July 16-31 WHAT'S INSIDE... Direct Tax Transfer Pricing Indirect Tax What s inside DIRECT TAX 1. CBDT issues draft Buy-back tax rules for public comments 2. Export commission not taxable, applying Explanation
More informationIN THE HIGH COURT OF GUJARAT AT AHMEDABAD. SPECIAL CIVIL APPLICATION No of CADILA HEALTHCARE LTD - Petitioner(s) Versus
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 15566 of 2011 CADILA HEALTHCARE LTD - Petitioner(s) Versus ASST.COMMISSIONER OF INCOME- TAX(OSD) & 1 - Respondent(s) Appearance :
More informationBEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI. A.A.R. No.866 of 2010 PRESENT
BEFORE THE AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI 14 th Day of November, 2011 A.A.R. No.866 of 2010 PRESENT Justice Mr. P.K.Balasubramanyan (Chairman) Mr. V.K. Shridhar (Member) Name & address
More information