sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
From the Courts »
  Suresh M. Jamkhindikar vs. ACIT (Bombay High Court)
 Mangammal @ Thulasi vs. T.B. Raju (Supreme Court)
 Mahabir Industries vs. PCIT (Supreme Court)
  Oriental Bank Of Commerce Vs. Additional Commissioner Of Income Tax
  Suresh M. Jamkhindikar vs. ACIT (Bombay High Court)
  Union of India vs. Pirthwi Singh (Supreme Court)
 Cromption Greaves Limited vs. CIT (ITAT Mumbai)
 Director Of Income Tax Vs. M/s. Modiluft Ltd.
 Director Of Income Tax Vs. M/s. Royal Airways Ltd.
 Lally Motors India (P.) Ltd vs. PCIT (ITAT Amritsar)
  Mehsana District Co-operative vs. DCIT (Gujarat High Court)

Key info disclosure not a must for tax treaty benefits: ITAT
July, 20th 2008

A company is entitled to tax treaty benefits between India and another country even if it fails to disclose some key information.

This decision was made by the Income-Tax Appellate Tribunal (ITAT), Mumbai, in the case of Sun Chemical of the Netherlands. The case involved capital gains from shares acquired by Sun from an associate company. The transaction pertained to shares of Coates of India.

The income-tax department denied the benefit of treaty between India and the Netherlands on the ground that the company failed to disclose a vital information in its return which had a bearing on determining the quantum of capital gains.

The company did not mention that the shares were acquired from an associate enterprise an information crucial for applying the transfer pricing rules. Initially, the company wanted the income to be treated under the provisions of the Indian Income-Tax Act, preferring it over the Double Taxation Avoidance Agreement (DTAA) between India and the Netherlands.

It, however, changed its earlier stance and sought the benefits under DTAA when the income-tax department found out that the share transaction was with an associate company and the acquisition price was lower than what was declared, resulting in higher income.

Under the India-Netherlands DTAA, capital gains arising in India can be taxed only in the Netherlands. The assessing officer refused to provide the benefit of DTAA to the company on the ground that it had defaulted and provisions of DTAA do not deal with any amount payable on account of default.

He further stated that the company was attempting to set off the long-term capital loss against the short-term capital gains by opting to be assessed under the Income-Tax Act. He even stated that only when the company was caught on its default, it sought the benefit of DTAA. The assessing officer, making another point to support his stand, pointed out that under the provisions of the DTAA treaty, benefit can be availed by honest and tax compliant entities only.

But, ITAT, in a decision in end June, made it clear that the default defined under the domestic law is different from the default explained in the DTAA and, therefore, the stand of the tax department denying treaty benefit to the company cannot be accepted.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Portal Design Website Design Portal Designing Website Designing Web Design Professional Portal Design Professional Website Design Professional Web Design Portal Design India Website Design India Portal Designing India Website Designing India Web Design India Professional Portal Design India Professional Website Design India Chicago Professional Web Design New York Professional Web Design California Website Design Florida Website Design New Jersey Website Design Britain UK Website Design London Manchester Website Design

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions