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2011 (3) TMI 22 - AAR - Income TaxDTAA – Whether the sale of share by on non resident to another non resident will be taxable as capital gain in India - The applicant submits that as ORG-IMS is an Indian company, the situs of its shares would be in India - The applicant submits that under section 90(2) of the Act, an assessee has an option to be governed by the provision of the Tax Treaty, if they are more beneficial than the provision of the Act - The applicant submits that transfer of shares of ORG-IMS by the applicant would be governed by Article 13(5) of the Tax Treaty. - Any capital gain earned by it would be taxable only in Netherlands Regarding filing of return - The learned Advocate argued that section 139(1) of the Act is merely a machinery section and would apply only where the transaction entered into by the foreign assessee is liable to be taxed in India - As per the third proviso, every company is required to file its return of income, whether it has an income or a loss - If the power to tax be granted it is difficult to appreciate the argument that when the resulting income is nil, there is no obligation to file return of income. It may be mentioned that where it is not necessary for a non- resident to furnish return under section 139(1) of the Act, the statue has specifically provided, as is the case under section 115AC(4) of the Act. Apart, it is necessary to have all the facts connected with the question on which the ruling is sought or is proposed to be sought in a vide amplitude by way of a return of income than alone by way of an application seeking advance ruling in Form 34C under IT Rules 1962. Instead of causing inconvenience to the applicant, the process of filing of return would facilitate the applicant in all future interactions with the Income-tax department.
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