O R D E R (By Mr. Justice Syed Shah Mohammed Quadri)

Transcription

1 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. A.S. Narang (Member) Monday, the thirty-first July Two thousand Six A.A.R. NO. 666 OF 2005 Name & address of the applicant Gameplan Sports Private Limited 19B, Shakespeare Sarani, Kolkata Commissioner concerned Present for the Department Present for the Applicant Commissioner of Income-tax-II Kolkata Mr. S.D. Kapila Mr. S. Ramchandani Shri S.K. Ray, Advocate Shri P. Mukherjee, ACA O R D E R (By Mr. Justice Syed Shah Mohammed Quadri) The applicant is an Indian company. It is engaged in the business of management of sports events. On the assertion that it entered into an agreement with M/s Taj Television Ltd. PO Box , Dubai Media City, Dubai, UAE on it sought advance ruling of the Authority on the following questions:- i. What is the nature of the contracted payment to be made to Taj Television Ltd. (i.e. whether this is royalty or business income in the hands of the recipient)? ii. Whether the payment to be made to Taj Television Ltd. for purchase of advertising rights is taxable in India under the provisions of the Income tax Act1, 1961? 1

2 iii. iv. Whether resort can be taken to the Double Taxation Avoidance Agreement between India and UAE for determining taxability of the said payment? If so, what is the article applicable for determining taxability of the said payment? Whether tax is required to be deducted at source before making the said payment? 2. During the course of hearing of the application on it became necessary to call for a copy of the UAE Tax Decree and the certificate of incorporation of M/s Taj Television Ltd. in Dubai. At that stage the applicant has come forward with the present petition under Rule 20 of the Authority for Advance Rulings (Procedure) Rules, 1996 (for short the Rules ) for amendment of records. 3. It is stated in the application, inter alia, that the Registered Office of the Taj TV Ltd. is at Mauritius and it is a resident of Mauritius. Certificate of incorporation issued by the Income Tax of Republic of Mauritius is enclosed to the petition. The certificate reads as under:- My ref /6/93/5160/RB/19 REPUBLIC OF MAURITIUS INCOME TAX DEPARTMENT TAX RESIDENCE CERTIFICATE TAJ TV LTD. IT IS HEREBY CERTIFIED THAT TAJ TV LTD is a company resident in Mauritius as from 12 July 2002 for income tax purposes under the Income Tax Act. This fifth day of August, two thousand and two. M. MOSAFEER Commissioner of Income Tax 2

3 On these facts the petitioner seeks amendment of the application by substituting Taj Television Ltd. Dubai with Taj TV Ltd, Mauritius, 3. Mr. S.K. Ray, the learned counsel for the applicant, strenuously contends that by substituting the name of the Taj TV Ltd. Mauritius for Taj Television Ltd. Dubai the facts will not be altered; indeed only the third question may not arise from the agreement, therefore he would give up that question. Mr. S.D. Kapila, the learned counsel for the Revenue, on the other hand, invited our attention to the agreement between the applicant and the Taj Television Ltd. Dubai dated , referred to above, and pointed out that Taj Television Ltd. Dubai is apparently a different company. It is that company which is referred to as a party to the agreement with the applicant. Further in various annxures to the application, the company is referred to as Taj Television Ltd. Dubai. Mr. Ray, however, submits that the company -Taj Television Ltd. Dubai is only a branch of Taj TV Ltd. Mauritius and therefore, it would make no difference. 4. Having heard the learned counsels at the length, we are of view that the petition under Rule 20 of the Rules is misconceived. Rule 20 of the Rules read as follows:- Rule 20 Amendment of the Record If at any stage of the proceedings before the Authority it appears that there is any factual or material error in the records the same shall be amended after hearing the applicant and the Commissioner. A perusal of the Rule 20 of the Rules shows that what is permitted to be amended by way of amendment of records is any factual or material error and such a amendment can be made at any stage of the proceedings before the Authority. The real question, therefore, is whether 3

4 on the facts and in the circumstances of the case can the rule be invoked to substitute one company for another company by way of amendment of record. From the above narration of facts, it appears to us that M/s Taj Television Ltd. Dubai and M/s Taj TV Ltd. Mauritius are two different companies. In the absence of any material or record we are also unable to accept that the Dubai Company is only a branch of Mauritius Company. The description given in the agreement, in respect of which advance ruling is sought in the application and other papers filed along with the application, the name of the Dubai Company appears. Even if the name of Mauritius Company is permitted to be substituted in the application, the said company s tax liability cannot be determined as in the agreement the name of Dubai Company is entered. For these reasons, we dismiss the application filed under Rule 20 of the Rules by the applicant. (JUSTICE S.S.M. QUADRI) CHAIRMAN F.No. AAR/666/2005 (A.S. NARANG) MEMBER Dated. This copy is certified to be a true copy of the order and is sent to: 1. The applicant. 2. The CIT-II, Kolkata (Shyama S. Bansia) Addl. Commissioner of Income Tax(AAR) 4

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