Direct Tax Amicus for the month of December 2015 covers article titled ‘Situs of IP for taxing rights’. According to the author, States that want to extend their taxing power on IP holding companies should first have some understanding of the nature of IP rights. It is stated that sound tax policies should take into account the interest of IP rights holders and then balance those interests with domestic taxation rules.
Notifications and Circulars part of the Amicus includes CBDT Notification amending the reporting requirements for payments made to non-residents. Rule 127 has been inserted in Income Tax Rules, 1962 to provide that communications – notice, summons, requisition, order or any communication under the Income Tax Act, 1961 shall be emailed on specified e-mails of the assessee.
Under Ratio decidendi, the issue brings to readers summary of the Delhi High Court holding that AMP expenses are not always an international transaction. It has also been held by the Court that production of a radio programmes is manufacture of a ‘thing’. ITAT has held that no penalty can be levied on the assessee just because it is possible to arrive at two different estimates of arm’s length price. For brief note on these orders, the PDF file of this issue may be seen.