9911796707
TMI Blog2000 (12) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ising from the sale of capital assets in Pakistan was not taxable in India irrespective of the fact whether it was subjected to tax in Pakistan or not for the assessment year 1966-67?" The factual position as indicated in the statement of case is as follows: The assessee, i.e., State Bank of India, was the successor to National Bank of Lahore Ltd. (hereinafter referred to as the "Lahore Bank"). For the assessment year 1966-67, the Income-tax Officer levied tax of Rs. 2,51,197 in respect of certain properties sold in Pakistan holding them taxable under the head "Capital gains". The assessee's case was that income from capital gains in respect of sale of the properties in Pakistan was liable to tax in Pakistan and not in India. This conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to (b) From the sale, exchange 100 per cent. by the Nil by the other. or transfer of other dominion in assets which the sale, exchange or transfer takes place The Tribunal's conclusion was that since capital gains arising from the sale of capital assets was not taxable in India, it was immaterial whether it was subjected to tax in Pakistan or not. On being moved for reference, the question as set out above has been referred for the opinion of this court. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service. Learned counsel for the Revenue submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accruing or arising without the territories of the dominions is chargeable to tax in both the dominions, each dominion shall allow an abatement equal to one-half of the lower amount of tax payable in either dominion on such doubly taxed income. Article VI: (a) For the purposes of the abatement to be allowed under article IV or V, the tax payable in each dominion on the excess or the doubly taxed income, as the case may be, shall be such proportion of the tax payable in each dominion as the excess or the doubly taxed income bears to the total income of the assessee in each dominion. (b) Where at the time of assessment in one dominion, the tax payable on the total income in the other dominion is not known, the first dominion shall mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the consequential tax liability. Thereafter, the agreement takes over and the dominion must allow abatement in the degree mentioned in article IV. Clause (b) of article VI permits the dominion to make a demand without allowing the abatement if the tax payable on the total income in the other dominion is not known, but the collection of the tax has to be held in abeyance for a period of one year at least to the extent of the estimated abatement. If the assessee produces the certificate of assessment in the other dominion within a period of one year or any longer period allowed by the Income-tax Officer, the uncollected portion of the demand has to be adjusted against the abatement allowable under the agreement. But if no such certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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