01 January 0001

Direct Tax Amicus: May 2016


India-Mauritius Treaty – The long awaited overhaul and its underlying consequences -

India entered into The Double Taxation Avoidance Agreement (‘DTAA’) with Mauritius on 24th August, 1982. As per the treaty provisions the right to tax the gains arising to a resident of Mauritius from transfer of shares of an Indian company was completely allocated to Mauritius. The Indo-Mauritius DTAA stands modified, with both the Government of India and the Government of Mauritius entering into a Protocol to this effect on 10th May, 2016. According to the amendment, gains from alienation of shares acquired on or after 1st April, 2017 in an Indian company in India is liable to tax in India from 1st April, 2017…


Ratio Decidendi

  • Retrospective increase in rent does not mean that there was escapement of income in earlier years – Supreme Court
  • Term loan borrowed for purchasing capital asset, when waived by a bank would constitute business income of the borrower – Madras High Court
  • Payment for downloading copyrighted photograph is not royalty – ITAT, Mumbai
  • Transaction between two foreign parties cannot constitute a comparable uncontrolled transaction for determining transfer price – ITAT, Delhi
  • Advance Pricing Agreements would have persuasive value in determining transfer price for years prior to the agreement being made applicable – ITAT, Delhi


April, 2016/Issue-21 May, 2016/Issue-22

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