Connect us       New User?     Subscribe Now
Confirm your Email ID for Updates
30.03.2020 - Voice of CA presents - Useful Updates
Monday, March 30, 2020

  I. Headlines Today:   

  1. CBDT likely to soon notify tax compliance relaxations  (Click for detail)
  2. Labour Ministry amends EPF norms to allow withdrawal of advance by in event of Covid-19 outbreak  (Click for detail)
  3. Lockdown period won’t be counted in IBC timeline: IBBI  (Click for detail)
  4. OECD releases 2nd peer review report assessing countries efforts on preventing treaty shopping  (Click for detail)
  5. RBI: Agency banks must keep their designated branches open for ‘over the counter’ transactions on March 31, 2020  (Click for detail)

II. International Taxation Case Law: 

Sofina S.A. Vs. ACIT (International Taxation), I.T.A. No. 7241/Mum/2018, Date of Pronouncement: 05.03.2020, ITAT - Mumbai

In the case of Sofina, Hon’ble ITAT has held as under:-

1.    Shares of a Foreign company having substantial assets in India if transferred by a non resident to other then gain attributable to such transfer is not taxable merely because the Company has substantial assets in India.

2.    While holding so the ITAT has interpretated the provisions of section 5(1) & 9 and held that both these section does not cover a non resident Company, fiction of these section would only alter the residency status of a Company,considering no corresponding provision exists under the India Belgium DTAA. Explanation 5 to Section 9(1)(i) of the IT Act does not define residence of a person and only deems shares of a foreign company to be situated in India.

3.    ITAT further held that expression used in Article 13(4) i.e directly and indirectly is a see through provision and this article is related to transaction of immovable properties. However the “see through provisions” are not present in Article 13(5) of the India Belgium treaty. Hence the transaction of transfer of shares cannot be couched in see through provisions.

4.    Lastly the ITAT held that unilateral amendment of domestic provisions would not override the provision of DTA and hence provisions of domestic law would not override the DTA provisions.  

(Please click here for judgment)


Golden Rules:

  "Success has only one formula that is
stop thinking in terms of limitations
and start thinking in terms of possibilities" 


Thanks & Regards


Voice of CA 

« Back
Online Poll
Connect Us       New User?     Subscribe Now