If management & control is outside Sikkim, income is Taxable

Sikkim State Income Tax Manual 1948 – Where management & control is outside Sikkim, income to be taxed under Income Tax Act, 1961 – Delhi High Court.

Brief of the Case

Delhi High Court held In the case of CIT vs. Mansarovar Commercial Pvt. Ltd. that Mr. Rattan Gupta was not only doing the audit work of the five Assessee companies, but determining who should be the directors of the said companies. This coupled with the fact that the blank signed cheque books of all the five companies together with rubber seals, the letter heads, the blank signed cheques and other records were also found in the office of Rattan Gupta & Co., the factual determination by the AO that the management and the control of the five companies was actually wholly situated in Delhi gets fortified. So, in the instant case, it is a fact that Rattan Gupta & Co. did not merely render professional services but had a vital say in the control and management of the five Assessee companies. Hence all the Assessee, incorporated under the company law of Sikkim, are resident Indian companies as there whole management & controls are situated outside state of Sikkim. If any income accrued to them or was earned by them in India even prior to 1st April 1990, then such income is taxable under the Income Tax Act.

Facts of the Case

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