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2013 (6) TMI 216 - AUTHORITY FOR ADVANCE RULINGSMinimum Alternate Tax (MAT) - Section 115JB - Whether applicable to foreign company - applicability of MAT on capital gain exempt u/s 10(38) - Held that:- Normally, when the charging provision itself indicates how to deter-mine the chargeable income and the rate at which it is to be taxed, one cannot resort to the so-called machinery provision to nullify the effect of the charging provision. Here, the requirement of the machinery provision, (if section 115JB(2) is a machinery provision) has to be complied with by one who comes within the sphere of the charging provision, that is, section 115JB(1). The principle of B. C. Srinivasa Setty [1981 (2) TMI 1 - SUPREME Court] cannot be legitimately invoked to find non-taxability when the taxability is patent. The argument that a foreign company which is an investment company cannot comply with section 115JB(2) of the Act since it has no other business in India may only mean that the long-term capital gain covered by section 10(38) of the Act may itself become the book profit for the purpose of section 115JB. A foreign company under section 112 of the Act may have to pay tax at 20 per cent. of the gain, but for section 10(38) read with section 115JB(1). The applicant has insisted even at the concluding hearing that it does not seek or want a ruling on the applicability of section 10(38) of the Act canvassed for by the Revenue. I have endeavoured to show that for giving a ruling satisfactory to its conscience, this Authority has to interpret both sections, section 10(38) and section 115JB of the Act together. That alone will answer the question of taxability of the transaction in question, in the context of section 115JB of the Act. Since the applicant does not seek and does not want a ruling on all the aspects arising out of the ques-tions posed for ruling, I think that it would be proper to decline a ruling on the questions as raised. Hence, I decline to give a ruling on this application. As noticed by this Authority, in Microsoft Operations P. Ltd., In re (AAR No. 781 of 2008) [2009 (2) TMI 23 - AUTHORITY FOR ADVANCE RULINGS] this Authority has the discretion not to entertain an application or to give a ruling, if the circumstances warrant it. I consider this a fit case to decline a ruling on the questions as sought for by the applicant. The application is hence disposed of by refusing to give a ruling on the questions now posed.
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