Taxation of foreign telecasting companies—Guidelines for computation of income-tax, etc.
The Central Board of Direct Taxes, vide Circular No. 742, dated 2nd May, 1996, issued guidelines for taxation and computation of income of foreign telecasting companies. The guidelines were applicable up to 31st March, 1998. It has been decided to extend the circular beyond 31st March, 1998, and the guidelines issued in the abovementioned circular would be applicable to all pending cases irrespective of the assessment year involved until further orders.
Circular : No. 765, dated 15-4-1998.
JUDICIAL ANALYSIS
EXPLAINED IN – TVM Limited v. CIT [1999] 102 Taxman 578 (AAR-New Delhi) in following words:
“[Guidelines contained in Circular No. 742, dated 2-5-1996 regarding taxation of foreign telecasting companies] are only general in character and it is open to assessees to accept them if they are beneficial to them. To the extent these guidelines purport to extent the applicability of the presumptive rate of profits even to cases where the foreign telecasting company has no permanent establishment in India, it cannot be treated as laying down the correct position in law.” (p. 598).
