Law:

Section:

2008] 302 ITR 289 [2008] 170 Taxman 341 (AAR) AUTHORITY FOR ADVANCE RULINGS, NEW DELHI Foster's Australia Ltd., In re JUSTICE P. V. REDDI, CHAIRMAN A. SINHA AND RAO RANVIJAY SINGH, MEMBER AAR NO. 736 OF 2006 MAY 9, 2008 Section 9 of the Income-tax Act, 1961 - Income - Deemed to accrue or arise in India - Applicant, a non-resident company, was engaged in brewing, processing, packaging, marketing, promoting and selling of beer products in Australia and abroad under various brands including Foster's brand - In 1997, it entered into a brand licence agreement (B.L. agreement) with Foster's India, an Indian company, whereby applicant granted latter an exclusive licence to brew, package, label and sell Foster's beer and an exclusive right of use of trademarks within Indian territory for a consideration - In 2006, applicant entered into a sale and purchase (S&P) agreement with 'SAB' UK for transfer of shares and other intangible assets and as a sequel to that agreement, a deed of assignment came to be executed between applicant and 'SKOL', an Indian company nominated by SAB, whereby applicant conveyed its proprietary rights and interests, it had in trademarks; Foster's brand intellectual property; and Foster's brewing intellectual property, free from all encumbrances, to SKOL for use within territory of India-Applicant's case is that rights and interests in trademarks, Foster's brand IP and brewing IP got restored and vested with applicant in Australia consequent upon termination of B.L. agreement dated 13-10-1997 as a result of which situs of said assets cannot be said to be within India at time of S & P agreement and, therefore, both asset and place of contract being outside India are beyond reach of Indian Income-tax Act - Whether intellectual property in form of Foster's trademarks and brand, which were an integral part of business of Foster's India, that was being carried on with licence granted by applicant-company, together with goodwill they generated by reason of such user, can be said to be situated in India within meaning of Explanation to section 9(1) and situs of those intellectual property assets should not be traced and confined only to place…

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