Recently Bombay high court in the case of The Prudential Assurance Company Ltd. (Taxpayer) [AIT-2010-170-HC] on the binding nature of a ruling pronounced by the Authority for Advance Rulings (AAR), reiterated the relevant provisions of the Indian Tax Laws (ITL) and held that an AAR ruling is binding on a taxpayer and the Tax Authority, in relation to the transaction in respect of which the AAR ruling was sought.
Recently Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (Taxpayer), [2010-TIOL-21-SC-IT] held that merely making a claim in the return of income which is not accepted by the Tax Authority or which is not sustainable under the ITL, in itself, does not amount to furnishing inaccurate particulars by the Taxpayer and, hence, is not liable to penalty.
This Tax Alert summarizes a recent ruling of the Authority for Advance Rulings (AAR) [A.A.R. No. 797 of 2009] in the case of M/s Umicore Finance Luxembourg (Applicant). There was a sale of shares of a company by its shareholders which had received such shares on conversion of a firm into the company, under the provisions of Part IX of the Indian Company Law (ICL).
Recently Mumbai Income Tax Appellate Tribunal in the case of Valentine Maritime Mauritius Ltd (Taxpayer), [2010-TIOL-195-ITAT-MUM] held that the number of days relating to each of the contracts cannot be aggregated to determine the ‘duration test’, as the activities carried out therein are not inextricably interconnected or interdependent and do not form a coherent whole in conjunction with each other.
In a recent ruling Mumbai Income Tax Appellate Tribunal (ITAT) [2010- T11-41-ITAT-MUM-INTL] in the case of J Ray McDermott Eastern Hemisphere Ltd. (Taxpayer) held that receipts pertaining to transportation and installation contract executed by the Taxpayer outside India cannot be taxed under the special provisions, which provide for taxation of certain income of a non-resident on presumptive basis, if the income is not chargeable to tax under the general provisions of the Income Tax Act, 1961.
In a recent ruling in the case of Tekmark Global Solutions LLC (Taxpayer) [[2010] 3 taxmann 38 (Mum. – ITAT)] the Mumbai Income Tax Appellate Tribunal (ITAT) held that as the deputed personnel do not work under the control and supervision of the Taxpayer, such personnel do not create a PE for the Taxpayer in India.
This Tax Alert summarizes a recent ruling of the High Court (HC) of Delhi in the case of Van Oord ACZ India (P) Ltd. (Taxpayer) [2010-TIOL-187-HC-DEL-IT] on withholding tax obligation arising under the provisions of the Indian Tax Law (ITL) in respect of reimbursement of expenses to non-resident companies. The Delhi HC held that a payer is obligated to withhold tax only if the payment is chargeable to tax under the provisions of the ITL.
This Tax Alert summarizes a recent ruling of the Authority for Advance Rulings (AAR) in the case of Ernst and Young Pvt. Ltd. (Applicant) on the taxability of payments made for support services provided by an affiliate in the UK to the Applicant. The AAR held that the provision of support services does not ‘make available’ any technology to the Applicant and, hence, the payments made are not taxable in India as ‘fees for technical services’ (FTS) under the India-UK tax treaty (Tax Treaty).
The Authority for Advance Rulings (AAR) in the case of E*Trade Mauritius Ltd. (AAR No. 826 of 2009) has held that that capital gains arising from the sale of shares in an Indian company would be exempt from tax in India under Article 13(4) of the India-Mauritius Tax Treaty (tax treaty).
Whether income returned was a profit or loss, was really of no consequence. Therefore, even if no tax was payable, the penalty was still leviable. It is in that context, to be noted that even prior to the amendment it could not be read to mean that if no tax was payable by the Assessee, due to filing of return, disclosing loss, the Assessee was not liable to pay penalty even if the Assessee had concealed and/or furnished inadequate particulars. The necessary consequence thereof would be that even if Assessee has disclosed NIL income and on verification of the record, it is found that certain income has been concealed or has wrongly been shown, in that case, penalty can still be levied. The aforesaid position is no more res integra and it stands answered in favour of the Revenue and against the Assessee.
