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2010 (6) TMI 517 - AT - Income TaxDTAA - Reassessment - Income escaping assessment - Addition - Short term capital gain - Tax evasion - There is no dispute that the assessee was liable to be taxed in India in the relevant assessment year, and there is also no dispute that an asset belonging to the Indian PE of the assessee company, on which depreciation was claimed in India, was also sold in the previous year relevant to this assessment year - The assessee was taxable in India in respect of its PE, and therefore, the assessee was under an obligation to share all the facts relevant to its Indian PE – whether in respect of business profits or under any other head of income - On the facts of the present case, therefore, it cannot be said that the assessee had fully and truly disclosed all the material facts necessary for his assessment - Decided in the favour of the assessee Regarding taxability of gains - Held that: under the domestic law as also under the applicable tax treaty, the assessee is liable to be taxed in respect of gains on sale of PE assets - It is thus clear that the movement of rig to the international waters was clearly connected with and consequent to sale of the rig, and necessary for fulfilling part of seller’s obligations under the sale contract - That finding is, of course, without prejudice to our understanding, based on the reasoning discussed earlier in this order, that even deferral of sale or receipt of sale consideration, on sale of PE or PE assets, does not influence the tax liability in connection with sale of PE or its assets - Appeal is dismissed
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