2007 (1) TMI 545 - AUTHORITY FOR ADVANCE RULINGS - Income Tax

Head Note / Extract:
Whether, on the facts and in the circumstances of the case, the profits arising to Fidelity Hastings Street Trust : Fidelity Discovery Fund (hereinafter referred to as the " applicant" ) from the sale of portfolio investments in India will be treated as business income of the applicant ? Whether, on the facts and in the circumstances of the case, the applicant can be regarded as having a permanent establishment (" PE" ) in India in accordance with article 5 of the Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income entered into between the Government of the Republic of India and the Government of the United States of America (hereinafter referred to as the " treaty") ? Whether, on the facts and in the circumstances of the case, if the income is found to be in the nature of business income, in the absence of a PE in India and in the light of the provisions of article 7 read with article 5 of the Treaty, such business income of the applicant will be taxable in India ? Whether, on the facts and in the circumstances of the case, if it is found that the applicant has a permanent establishment in India under the treaty and if the income is found to be in the nature of business income, the business income of the applicant in India from the sale of portfolio investments will be taxable in India at the rate of 20 per cent. in the light of section 115AD of the Income-tax Act, 1961 (hereinafter referred to as the " ITA" ) ?