sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
From the Courts »
 DCIT Circle 2(1) Gurgaon vs Kellog Brown & Roof Engineering & Construction India Pvt. Ltd. 16th Floor, Tower-A, DLF Building, Nos. 5, DLF Cyber Terraces, DLF Phase-III, Gurgaon
 Dharam Pal, Garg R Kumar & Associates, 7, Adv. Chambers, RDC, Raj Nagar, Ghaziabad vs ITO, Ward-1(2), Ghaziabad
 Satish Singhal, 6, Patpar Road, Shivpuri, New Delhi vs ITO, Ward-11(1), New Delhi
 Vodafone Mobile Services Limited vs. Commissioner Of Service Tax, Delhi
 Anupam Sushil Garg, S/o Shri Vijay Garg, C/o Venus Cinema, Railway Road, Saharanpur. vs. Income-tax Officer, Ward-2, Saharanpur.
 Oriental Building & Furnishing Co.Ltd. C/o. Ravi Gupta, Advocate E-6A, Kailash Colony New Delhi vs. DCIT Circle-13(1) New Delhi.a
 Housing Board Haryana, Panchkula, Haryana
 Broadcast Engineering Consultants India Limited, Multi Location, Multi State
 Ranjana Sen Gupta Raghavan, H-1592, Chittaranjan Park, New Delhi-110019 vs. Income Tax Officer, Ward-71(2), New Delhi
 M/s Sony India Private Limited A-31 , Mohan Cooperative Industrial Estate New Delhi -44 vs. The Deputy Commissioner of Income tax , Circle 24 (1), New Delhi
 Manik Singh S/o. Dr. Meharban Singh, A-47, Sector-31, Noida Uttar Pradesh Noida vs. DCIT Room No. 408, 4th Floor, A- 2D, Aayakar Bhawan, Sector-24 Noida

Foreign cos' income from underwriting not taxable here: ITAT
June, 15th 2009

Foreign firms earning through underwriting services in India without having a permanent establishment here will not be required to pay tax on that income, tax tribunal said in a ruling.

Income Tax Appellate Tribunal (ITAT) gave this ruling in case of over Rs nine crore payment by auto maker Mahindra and Mahindra to the investment banking arm of France-based Paribas group Banque Paribas which acted as lead manager for the company's Global Depository Receipts in 1993 and 1996.

"The entire amount paid by the assessee (M&M) in relation to the FCCB issue, viz, management , selling and underwriting commission along with the reimbursement of expenses cannot be taxed in the hands of the non-resident (Banque Paribas) and resultantly there can be no obligation on the assesee to deduct tax at source," ITAT said in the order.

Mahindra and Mahindra Limited came out with Euro FCCB issues of the size of USD 74.75 million and USD 100 million dollars in November 1993 and July 1996 respectively for funding upgradation of its operations in India.

The company had paid a sum of Rs 8,21,00,838 as marketing and underwriting commission as well as selling commission to Paribas and a further sum of Rs 88,74,971 for expenses on travel, telephone, legal advisors etc.

Management and underwriting commission was to be provided at 1.5 per cent of the issue price and selling commission at the rate of 2 per cent. Such commission was to be retained by the lead managers from the issue price of GDRs.

The revenue authorities in their contention pointed out that M&M was liable to deduct tax at source for the payment made to the lead manager. According to them, tax liability stood at Rs 4.10 crore for the first issue and Rs 4.87 crore for the second offer, including interest for delay in payment.

The ITAT order said even if the income by way of underwriting commission is taken to be business profit by Banque Paribas, it has to be taxed only to the extent which is attributable to the permanent establishment of the firm in India.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions