TMI Blog2012 (8) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax in India in view of paragraph 4 of Article 13 of the DTAC between India and Mauritius. Applicability of transfer pricing provisions from Section 92 to Section 92F – Held that:- Section 92 to section 92F will be attracted since there is an international transaction between related parties. Whether that exercise is needed or would be fruitful is a different matter. Hence, Sections 92 to 92F would apply if the transaction is one coming within those provisions. Liability to withhold taxes u/s 195 – Held that:- Since there is no chargeability to tax in India there will be no obligation on the applicant to withhold tax u/s 195 Requirement to file return of income u/s 139 – Held that:- Since the income is not taxable in this count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. This Authority also kept open for consideration the question whether the transaction was one designed for avoidance of payment of tax in India. The following questions were accepted: 1. Whether on the facts and circumstances of the case the investment held by the Applicant in equity shares of GlaxoSmithKline Asia Private Limited (hereinafter referred to as 'GSKAPL') would be considered as 'capital asset' under Section 2(14) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act')? 2. Based on the facts and circumstances of the case, if answer to Question 1 is in the affirmative, whether capital gains arising from transfer of shares of GSKAPL by the Applicant to GlaxoSmithKline (Pte) Limited, Singapore (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Avoidance Convention (DTAC) between India and Mauritius. The applicant is entitled to take advantage of the DTAC by virtue of section 90(2) of the Act. The Revenue has raised the plea that this was not a bonafide transaction and is one designed for the purpose of avoidance of tax in India. It is also submitted that question No. 2 formulated by the applicant for ruling and accepted by this Authority does not seek a ruling on the applicability of Article 13 of the DTAC between India and Mauritius and hence that aspect cannot be considered while giving the rulings. 5. Question No. 1 formulated for ruling is whether the shares of GSKAPL are held by the applicant as a capital asset in terms of section 2(14) of the Act. The shares have been h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without appreciating that argument and that argument has to be dealt with. 8. The second aspect attempted was to say that a scheme for avoidance of tax was involved. But, there is hardly any material in support of that plea. The applicant has in its submission in response to the comments of the Revenue, elaborated the circumstances which justified the transaction as pleaded in the application. Here again, there is no sufficient reason put forward by the Revenue to justify a detailed enquiry into this aspect by this Authority. Suffice it to say, the transaction proposed cannot be characterized as the devising of a scheme for avoidance of payment of tax in India. 9. Since there is also no material to rebut the presumption of tax resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India there will be no obligation on the applicant to withhold tax under section 195 of the Act. Question No. 5 is ruled on thus. 13. This Authority has taken the view in recent times that once there is chargeability to tax under the Act, a return of income under section 139 of the Act will have to be filed, even if the benefit of the DTAC is claimed or a ruling is given on that basis. The applicant will therefore have the obligation to file a return of income in terms of section 139 of the Act. Question No.6 is ruled on thus. 14. Question No. 7 relates to the applicability of section 115JB of the Act. This Authority has taken the view that it will have application. It is not necessary to repeat the reasons here, already given in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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