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Latest Judicial Pronouncements International Taxation CA. Kapil Goel FCA LLB Advocate  [email_address]
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DHC Asia Satellite case 51 DTR 1  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object]
DHC Asia Satellite case 51 DTR 1 ,[object Object],[object Object]
DHC LG Cable case ,[object Object],[object Object]
DHC LG Cable case ,[object Object],[object Object],[object Object]
DHC LG Cable case ,[object Object],[object Object],[object Object],[object Object]
DHC LG Cable case ,[object Object],[object Object]
DHC Mother Dairy Fruit case 19/10/2010 : ITA 980/2009 ,[object Object],[object Object],[object Object],[object Object],[object Object]
Cal HC in PILCOM 238 CTR 387 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Cal HC in ABM Amro bank ,[object Object],[object Object]
Cal HC in ABM Amro bank ,[object Object]
Kar HC in JEBON Liaison office case ,[object Object]
M.Fabrikant and Sons l td ITA No. 4657 to 4660 and 3342/Mum/2007 ,[object Object],[object Object]
M.Fabrikant and Sons ,[object Object],[object Object]
Delhi bench of ITAT in LINMARK case ,[object Object]
Delhi bench of ITAT in LINMARK case ,[object Object]
Delhi bench of ITAT in LINMARK case ,[object Object]
M/s MRO (India) (P) Ltd., ITA No.3838/Del/2007 11.02.2011.  ,[object Object],[object Object]
Crane Software Ltd., I.T.A 741 & 742/Bang/2010 08 th /2/2011 ,[object Object]
Crane Software Ltd., I.T.A 741 & 742/Bang/2010 08 th /2/2011 ,[object Object]
Crane Software Ltd., I.T.A 741 & 742/Bang/2010 08 th /2/2011 ,[object Object]
Crane Software Ltd., I.T.A 741 & 742/Bang/2010 08 th /2/2011 ,[object Object]
Bang bench ITAT order on FTS  ,[object Object],[object Object],[object Object]
Bang bench ITAT order on FTS ,[object Object],[object Object]
Bang bench ITAT Filtrex case ITA 654/B/2009 Dt 28.01.2011 ,[object Object]
Delhi bench In Rolls Royce case FTS and Contract execution (business income) ,[object Object]
Delhi bench In Rolls Royce case FTS and Contract execution (business income) ,[object Object],[object Object]
Delhi bench In Rolls Royce case FTS and Contract execution (business income) ,[object Object],[object Object]
Delhi bench ITAT in Menlo  ,[object Object]
Delhi bench ITAT in Menlo ,[object Object]
Delhi bench ITAT in Menlo ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Some importance decisions on FTS for section 9(1)(vii) payment made to China Aluminum, towards bauxite testing charges is 'fees for technical services'  AshaPura Minichem 131 TTJ 291  ITA 6574/Mum/2009 Lab testing charges not FTS u/expl 9(1)(vii)  Punja PETROCHEM Merchant Shipping:  Payment to be FTS must be for acquiring/using technical know-how simplictier provided/made available by human element  Mum bench 49 DTR 97  Gist Case Law
AAR in Bharti AXA 326 ITR 477  ,[object Object]
AAR in Bharti AXA 326 ITR 477 ,[object Object],[object Object],[object Object]
Latest Feb & Mar’11 AAR orders Gist India Mauritius DTAA applied (to hold capital gains tax not leeviable u/art 13(4) of DTAA SC azadi Bachao applied (E-trade AAR also see) D.B.Z Mauritius India Canada DTAA: Non discrimination vis a vis indexation benefit under IInd proviso section 68:held not dsicriminatory where as Spl bench ITAT in 137 TTJ 1 (Ahd) held PE of US entity entitled to benefits u/s 80HHE Transworld Garnet 52 DTR 161 (refer 275 ITR 434) Sec 44BBB would apply to erection of plant separately taxable independent of off-shore supply  Toshiba Plant 52 DTR 155 Gist Case Law
Latest AAR orders Intl Taxation Essence of Service for FTS & Occasional trips and fixed place PE issue dealt Jt. Accreditation System 326 ITR 487  Distinguishing AAR in 289 ITR 464; 321 ITR 478& 322 ITR 678 held u/s 139(1) ROI to be filed by NR co. where taxability is there in Act and removed by DTAA  VNU Intl 28/3/2011 Gist Case Law
Latest ITAT orders Intl Taxation: Gist In our opinion mere existence of subsidiary does not by itself constitute the subsidiary company a PE of the parent. The main condition for constitution of PE is carrying on of business in India, Further the assessee does not have a right to use of DCILs premises & for Agency PE:  There should be some definite activity of the PE to which profits can be attributed. Unless it is so established, merely calling a person as agent acting on behalf of foreign non-resident would not by itself render him to be considered as an agency PE and pro tan to part of the profits of the nonresident is liable to be taxed in India.  Daimler 133 TTJ 766  Gist Case Law
Latest ITAT orders Intl Taxation: Gist Payment of compensation under arbitration award to NR Co. held to be business profit arising from trading contract cannot be taxed in absence of PE under DTAA Goldcrest 134 TTJ 355 Therefore a clear distinction was made between the lumpsum pymt for sale of technical know-how and the royalty for usage of the patent right during the period of agreement. Referred: Finolex case 106 TTJ 741  Vesil SPA italy 43 SOT 137 Prior to commencement of work by the non-resident assessee, its rig underwent for repairs in India. The period taken for repairs by the rig could not be included to work out stay of 120 days. Art. 5(2)(i) of DTAA with USA.  R& B Falcon 42 SOT 432 Gist Case Law
Latest ITAT orders Intl Taxation: Gist From here it follows that whereas common head  office expenses as per the Expl. (iv) are governed  by sec. 44C, the exclusive head office expenses  are deductible separately as per the regular  provisions of the Act. Bank of Bahrain The provisions of Sec 44BB estimate the income  at 10% if gross receipts and no separate claim for  expenditure is allowable. In view of this we are of  the opinion that the disallowance under section  43B of `5,86,624/- is not warranted. Clough ProjectsITA No. 670/Mum/2010 Payment of commission to agent Colin Davie for limited purpose of coordinating the engagement of artiste from outside India…not taxable u/art 18 and cannot be taxed u.art 7 without PE in India Wizcraft 135 TTJ 647 Gist Case Law
Thank You  Send your feedback/queries at advocatekapilgoel@gmail.com

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Latest Judicial Pronouncements International Taxation

  • 1. Latest Judicial Pronouncements International Taxation CA. Kapil Goel FCA LLB Advocate [email_address]
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  • 42. Some importance decisions on FTS for section 9(1)(vii) payment made to China Aluminum, towards bauxite testing charges is 'fees for technical services' AshaPura Minichem 131 TTJ 291 ITA 6574/Mum/2009 Lab testing charges not FTS u/expl 9(1)(vii) Punja PETROCHEM Merchant Shipping: Payment to be FTS must be for acquiring/using technical know-how simplictier provided/made available by human element Mum bench 49 DTR 97 Gist Case Law
  • 43.
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  • 45. Latest Feb & Mar’11 AAR orders Gist India Mauritius DTAA applied (to hold capital gains tax not leeviable u/art 13(4) of DTAA SC azadi Bachao applied (E-trade AAR also see) D.B.Z Mauritius India Canada DTAA: Non discrimination vis a vis indexation benefit under IInd proviso section 68:held not dsicriminatory where as Spl bench ITAT in 137 TTJ 1 (Ahd) held PE of US entity entitled to benefits u/s 80HHE Transworld Garnet 52 DTR 161 (refer 275 ITR 434) Sec 44BBB would apply to erection of plant separately taxable independent of off-shore supply Toshiba Plant 52 DTR 155 Gist Case Law
  • 46. Latest AAR orders Intl Taxation Essence of Service for FTS & Occasional trips and fixed place PE issue dealt Jt. Accreditation System 326 ITR 487 Distinguishing AAR in 289 ITR 464; 321 ITR 478& 322 ITR 678 held u/s 139(1) ROI to be filed by NR co. where taxability is there in Act and removed by DTAA VNU Intl 28/3/2011 Gist Case Law
  • 47. Latest ITAT orders Intl Taxation: Gist In our opinion mere existence of subsidiary does not by itself constitute the subsidiary company a PE of the parent. The main condition for constitution of PE is carrying on of business in India, Further the assessee does not have a right to use of DCILs premises & for Agency PE: There should be some definite activity of the PE to which profits can be attributed. Unless it is so established, merely calling a person as agent acting on behalf of foreign non-resident would not by itself render him to be considered as an agency PE and pro tan to part of the profits of the nonresident is liable to be taxed in India. Daimler 133 TTJ 766 Gist Case Law
  • 48. Latest ITAT orders Intl Taxation: Gist Payment of compensation under arbitration award to NR Co. held to be business profit arising from trading contract cannot be taxed in absence of PE under DTAA Goldcrest 134 TTJ 355 Therefore a clear distinction was made between the lumpsum pymt for sale of technical know-how and the royalty for usage of the patent right during the period of agreement. Referred: Finolex case 106 TTJ 741 Vesil SPA italy 43 SOT 137 Prior to commencement of work by the non-resident assessee, its rig underwent for repairs in India. The period taken for repairs by the rig could not be included to work out stay of 120 days. Art. 5(2)(i) of DTAA with USA. R& B Falcon 42 SOT 432 Gist Case Law
  • 49. Latest ITAT orders Intl Taxation: Gist From here it follows that whereas common head office expenses as per the Expl. (iv) are governed by sec. 44C, the exclusive head office expenses are deductible separately as per the regular provisions of the Act. Bank of Bahrain The provisions of Sec 44BB estimate the income at 10% if gross receipts and no separate claim for expenditure is allowable. In view of this we are of the opinion that the disallowance under section 43B of `5,86,624/- is not warranted. Clough ProjectsITA No. 670/Mum/2010 Payment of commission to agent Colin Davie for limited purpose of coordinating the engagement of artiste from outside India…not taxable u/art 18 and cannot be taxed u.art 7 without PE in India Wizcraft 135 TTJ 647 Gist Case Law
  • 50. Thank You Send your feedback/queries at advocatekapilgoel@gmail.com