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2010 (2) TMI 123 - AAR - Income TaxDividend income - AIH proposes to restructure the group and split AIH into two companies, one owning the business carried on in Europe and the other owning business carried on in Asia, North Africa & Latin America - AIH proposes to contribute shares of AFIIL (the Indian Company) along with non-European investments to ACHL. AIH - the applicant will not receive any consideration for the contribution so made. Such a contribution akin to a gift is permissible under the Bahrain legislation. Held that: By transferring the Indian Company shares to its 100% subsidiary, the applicant, in our view, will derive no profit and make no gain. Nothing in the form of money or money’s worth or nothing capable of being turned into money will accrue or arise to the applicant on the date of transfer. Therefore, the contention of the Revenue has to be rejected. Regarding applicability of transfer pricing: Section 92 obviously is not intended to bring in a new head of income or to charge the tax on income which is not otherwise chargeable under the Act. The interpretation sought to be placed by Revenue would amount to reading words into S.92 - the transfer pricing provisions in Chapter X are not attracted. ACHL is not obliged to withhold tax under S.195 of I.T.Act
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