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2016 (1) TMI 791 - AAR - Income TaxInvestment in equity shares of Dow Agrosciences India Private Limited - whether would be considered as ‘capital asset’ under section 2(14) of the Act? - whether capital gains arising from the proposed transfer of shares of DAS India by the Applicant to DAS Singapore (a company proposed to be incorporated in Singapore), would be subject to tax in India? - Held that:- There is no material before us to hold that the applicant has a PE in India and therefore, the income arising out of the transfer of shares should be treated as business income. We are unable to accept the claim of the Revenue regarding the PE. Once that objection is rejected, then the only relevant clause which remains for our consideration is Article 13(4) which is clear in itself. We have already recorded a finding on the PE that the applicant does not have any office, employees or agents in India nor does it have a permanent place from where it operates from India. These assertions of the fact have not been traversed by the Revenue even at the cost of repetition that there is no material before us to hold that the applicant has any PE in India. In that view even if the gains that the applicant makes from the proposed transfer are treated as business income, even then there will be no question of taxation on those gains. Application of Section 115JB - Held that:- With effect from 1.4.2015, the provisions of section 115JB would not be applicable to foreign company if the foreign company is a resident of a country having DTAA with India and such foreign company does not have a PE within the definition of the term in relevant DTAA or to the foreign company which is a resident of a country which does not have a DTAA with India and such foreign company is not required to seek registration under section 592 of the Companies Act, 1956 or section 380 of the Companies Act, 1956. It is clear that the present applicant is clearly covered as it is a company in Mauritius, which country has DTAA or as the case may be DTAC with India. Again we have already given a finding that the applicant does not have a PE in India. As such we answer this question in favour of the applicant holding that there will be no applicability of section 115JB to the applicant. Applicability of the provisions of Section 92 to 92F - - Held that:- Unless the transaction is taxable in India, there would be no application of Sections 92 to 95. Section 92 is not an independent charging section and would be applicable only if there is any chargeable income arising from the international transaction. In the present case even though the proposed transfer of shares could result in income/capital gain from the international transaction since this income is not chargeable to tax in India in accordance with Article 13, there will be no question of the applicability of section 92 to 92F. Applicability of section 195 - Held that:- The capital gains earned out of proposed transaction are not taxable there will be no question of the applicability of section 195 of the Act. As per the Ruling of the Hon’ble Supreme Court in Transmission Corporation of AP Ltd. vs. CIT [1999 (8) TMI 2 - SUPREME Court ]. Requirement to file return of income under section 139 - Held that:- No applicability of section 139(1) of the Act to the present applicant
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