9911796707
TMI Blog1998 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst Rs. 4,80,000 computed by the Inspecting Assistant Commissioner (Assessment) ?" The assessee is a non-resident company. The relevant assessment year is 1979-80. On February 19, 1968, the assessee acquired 3,600 shares of Synthetic Limited (an Indian company), in United States currency at the face value of Rs. 1,000. On April 21, 1978, the assessee sold 600 shares to Prion Chemicals and Detergent Pvt. Ltd. The sale proceeds were received by the assessee in Indian currency and remitted to the United States in foreign currency. Before the Income-tax Officer, the assessee disclosed in its return an income in the sum of 5,084 U. S. $ as taxable capital gain and on the basis of rule 115 of the Income-tax Rules, 1962 ("the Rules" for sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction in its books of account in U. S. currency ; the assessee has sold the shares to another non-resident company ; the price was fixed in Indian currency with the approval of the Reserve Bank of India, but the assessee-company received monies duly converted into dollars, therefore, the assessee-company is entitled to conversion rate as per rule 115 of the Rules. On February 19, 1968, the assessee acquired 3,600 shares of Synthetic Ltd. at the value of Rs. 1,000 per share with prior approval of the Reserve Bank of India. On April 21, 1978, the assessee sold 600 shares to Prion Chemicals and Detergent Pvt. Ltd., another non-resident company. On April 15, 1978, the Reserve Bank of India granted approval to the said sale at the rate of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of shares took place in India in Indian rupees. In these circumstances, this court held that the question of converting the cost of acquisition and sale price into foreign currency at the rates prevailing at the relevant time, and then converting the same into Indian rupees to find out the amount chargeable to income-tax under the head "Capital gains" did not arise. This court in the case of CIT v. Pfizer Corporation [1993] 202 ITR 115 considered the case of the assessee who received the dividends declared in India. In this case, the assessee, a non-resident company was a shareholder of an Indian company which was its subsidiary. The assessee received net dividend in India amounting to Rs. 72,30,000. This amount was remitted to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of shares from the sale proceeds in Indian currency. This is not a case for application of rule 115 of the Rules as the income earned by the assessee was in Indian currency and the said amount was subsequently converted into U. S. dollars. The price was fixed in Indian currency with the approval of the Reserve Bank of India. The approval granted by the Reserve Bank of India was for a transaction in Indian currency. Thus, we are of the opinion that the Income-tax Officer and the Commissioner of Income-tax (Appeals) were right in overruling the assessee's submission for application of rule 115 of the Rules and the Income-tax Appellate Tribunal committed an error in accepting the assessee's submission and applying rule 115 of the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
