Law:

Section:

Section 112, read with section 48, of the Income-tax Act, 1961 - Capital gains - Tax on long term capital gains - Whether ambit of proviso placed below sub-clause (d) of section 112(1) extends not only to sub-clause (d) to section 112(1) but to all sub-clauses to section 112(1) or in other words, proviso below sub-clause (d) is a proviso to section 112 (1) - Held, yes - Whether application of said proviso is based on capital asset to which provisions of second proviso to section 48 apply and since second proviso to section 48 is not applicable to non-residents, benefit of lower rate of tax under said proviso cannot be given to non-residents - Held, yes - Whether therefore, applicant, a non-resident company, is not eligible to avail benefit of lower rate of tax under said proviso on capital gains on sale of shares of Indian company - Held, yes FACTS The applicant is a company of Scotland. It has acquired shares of an Indian company, namely, CIL pursuant to a share purchase agreement on 12-10-2006. On 12-10-2009, it transferred certain shares of CIL to other Indian company PCIL for certain consideration. The transaction took place in off market mode and not through the recognized stock exchange. The applicant has sought advance ruling on the question whether tax payable on long-term capital gains arisen to it on sale of equity shares of CIL will be 10 per cent of amount of capital gains as per proviso to section 112(1). The revenue contends that in the instant case occasion to apply the proviso to section 112(1) does not arise as the 2nd proviso to section 48 is not applicable to non-residents. The assessee, on the other hand, contends that the phrase 'before giving effect to provisions of second proviso to section 48' used in the proviso to section 112(1) has been misinterpreted by the Tribunal in case of BASF Aktiengesellchaft v. Dy. DIT [2007] 293 ITR 1 (Mum.). It contends that view of the Tribunal that as the second proviso to section 48 is not applicable to non-residents, who are covered by the first proviso to section 48, the proviso to section 112(1) will also not apply to the non-residents; and that the eligibility to avail benefit of indexation under 2nd…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492