IT/ILT : There can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India, which does not derive bulk of its value from asset situated in India
IT/ILT : Gains arising from sale of a shares of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India would not be taxable under section 9(1)(i) read with Explanation 5 thereto
■■■
[2014] 49 taxmann.com 125 (Delhi)
HIGH COURT OF DELHI
Director of Income-tax (International Tax)
v.
Copal Research Ltd., Mauritius*
S. RAVINDRA BHAT AND VIBHU BAKHRU, JJ.
W.P. (C) NOS. 2033,2470,2590, & 2597 OF 2013†
AUGUST 14, 2014
Section 9 of the Income-tax Act, 1961, read with article 13 of Model OECD Convention - Income - Deemed to accrue or arise in India (Capital gains) - Whether there can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India which does not derive bulk of its value from assets situated in India - Held, yes - Whether gains arising from sale of a share of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India, would not be taxable under section 9(1)(i) read with Explanation 5 thereto - Held, yes [Paras 28 and 33] [In favour of assessee]
IT/ILT : Gains arising from sale of a shares of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India would not be taxable under section 9(1)(i) read with Explanation 5 thereto
■■■
[2014] 49 taxmann.com 125 (Delhi)
HIGH COURT OF DELHI
Director of Income-tax (International Tax)
v.
Copal Research Ltd., Mauritius*
S. RAVINDRA BHAT AND VIBHU BAKHRU, JJ.
W.P. (C) NOS. 2033,2470,2590, & 2597 OF 2013†
AUGUST 14, 2014
Section 9 of the Income-tax Act, 1961, read with article 13 of Model OECD Convention - Income - Deemed to accrue or arise in India (Capital gains) - Whether there can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India which does not derive bulk of its value from assets situated in India - Held, yes - Whether gains arising from sale of a share of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India, would not be taxable under section 9(1)(i) read with Explanation 5 thereto - Held, yes [Paras 28 and 33] [In favour of assessee]
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