Home Case Index All Cases Income Tax Income Tax + AAR Income Tax - 2021 (9) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 735 - AAR - Income TaxAdvance ruling u/s 245R - ruling sought in respect of taxability of transactions from the respective tax treaty perspective (India-Netherlands Tax Treaty and India-Switzerland Tax Treaty) - as per AR there was no question of valuation involved while determining taxability from tax treaty perspective and that ruling was sought only on legal principle as to the eligibility of benefit under the tax treaty AND the applicant had not raised any question regarding taxability or otherwise of the transactions under the provisions of Income-tax Act - HELD THAT:- The issue of valuation of any share or the issue of computation of capital gain on transfer of the shares is not found involved in the questions raised by the applicant. The exercise of valuation of shares (if at all necessary) and the computation of capital gains has to be undertaken by the Assessing Officer only when the issue of taxability of capital gain on transfer of shares is decided in favour of the Revenue. We do not find any involvement of determination of fair market value of any property (shares) in the questions raised in the application. In the case of Worldwide Wickets, In re.[2018 (2) TMI 1428 - AUTHORITY FOR ADVANCE RULINGS, MUMBAI] as held that the computation of capital gains is embedded in the concept of valuation of shares and merely for this reason the question of capital gains arising in the application cannot be held to be barred by clause (ii) of the proviso to section 245R(2) of the Act. Considering the precise questions raised by the applicant on the taxability of capital gains and the obligation to deduct tax under section 195 as well as the decision of the Authority on this issue, the objection of the Revenue on the issue of involvement of determination of fair market value of the property is rejected. As regarding clause (iii) of the proviso to section 245R(2) of the Act, the Revenue has submitted that it is not in a position to make a comment at present as all the details are not available. Though the applicant has disputed the contention of the Department, in the interests of justice, it will be fair to leave this matter open. Accordingly, the Department is free to bring on record any adverse evidence in respect of transaction being designed prima facie for avoidance of tax in the course of merit hearing. The application is admitted under section 245R(2) of the Act.
|