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TMI Blog2012 (8) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... oSmithKline (Pte.) Limited, Singapore is also a company that is a part of the GlaxoSmithKline group. As a part of global reorganization of the group businesses, the applicant proposes to transfer the shares in GSKAPL held by it to GSK(Pte.) Singapore. The transfer is for cash consideration at fair market value. It is in that context that the applicant approached this Authority with the present application. 3. After hearing the applicant and the Revenue, this Authority allowed the application under section 245R(2) of the Act to render rulings under section 245R(4) of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld suffer any withholding tax as per Section 195 of the Act? 6. Based on the facts and circumstances of the case, if the transfer of shares of GSKAPL is not taxable in India, whether the Applicant is required to file any return of income under Section 139 of the Act? 7. Whether the provisions of section 115JB of the Act shall be applicable to the Applicant? 4. According to the applicant the income derived by the proposed sale would be capital gains and though it is taxable in India under the Income-tax Act, it is not taxable in this country in view of paragraph 4 of Article 13 of the Double Taxation Avoidance Convention (DTAC) between India and Mauritius. The applicant is entitled to take advantage of the DTAC by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia by virtue of paragraph 4 of Article 13 of the DTAC. 7. The contention of the Revenue that the question as formulated does not invoke the DTAC cannot be accepted for the reason that in the application itself it is conceded that the income from the transaction would be chargeable to tax as capital gains in India under the Act, but that in view of paragraph 4 of Article 13 of the DTAC, it cannot be taxed in India. Section 90(2) of the Act has also been invoked and it is pleaded that the provision of the DTAC is more favourable to the applicant, thus invoking the DTAC. Hence a ruling on this question cannot be given without appreciating that argument and that argument has to be dealt with. 8. The second aspect attempted was to say that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of 'income' in the Act and the general meaning of income as per the dictionary, the said view cannot be agreed to. 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 in this case in view of the ruling on question No. 2 is a different matter. Strictly, the ruling on question No. 2 is that the income is chargeable under this Act but that it is taken out of its purview by the DTAC. So the ruling is that sections 92 to 92F would be applicable. 12. Since there is no chargeability to tax 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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