ADVANCE RULING |
Question 1 (ID 03) (Revision / Home work)
Designated Authority can determine any issue under the Income-tax Act, 1961 by giving `Advance Ruling'. Elaborate the meaning assigned to `Advance Ruling' under the aforesaid Act.
Question 2 (ID 04) (Revision / Home work)
Can a person resident in India seek advance ruling from the Authority for Advance Ruling?
Question 3 (ID 02) (Revision / Home work)
List a few instances of issues on which rulings can be asked for from AAR.
Question 4 (ID 01)
Mr. Sushil Kumar is a non-resident. The appeal pertaining to the assessment year is pending before the Appellate Tribunal, the issue involved being computation of capital gains. The same issue persists for the subsequent assessment year also. Mr. Sushil Kumar’s friend Mr. Sachin Gupta has obtained an advance ruling under chapter XIX-B of the Income-tax Act, 1961 from the Authority for Advance Rulings on an identical Point. Mr. Sushil Kumar proposed to use the said ruling for his assessment. Can he do so?
OR
R is a non-resident. The appeal pertaining to the assessment year is pending before the Appellate Tribunal, the issue involved being computation of income from house property. The same issue persists for the subsequent assessment year also. R’s friend has obtained an advance ruling under Chapter XIX-B from the Authority for Advance Rulings on an identical point. R proposes to use the said ruling for his assessment. Advise R suitably?
OR
Saba Karim is a non-resident. The appeal pertaining to the Assessment Year is pending before the Appellate Tribunal, the issue involved being computation of income form house property. The same issue persists for the subsequent Assessment Year also. Saba Karim’s friend Sheikh Ali has obtained an advance ruling under Chapter XIX-B of the Income Tax Act, 1961 from the Authority for Advance Rulings on an identical Point. Saba Karim proposes to use the said ruling for his assessment. Advise Saba Karim suitably?
OR
Who are the persons in respect of whom Advance Ruling given u/s 245R shall be binding?
Question 5 (ID 05)
A Foreign Company entered into contracts with several Indian companies for installation of mobile telephone system and made an application to the AAR for advance ruling on the rate of withholding tax on receipts from Indian Companies. One of the Indian Companies made an application to its Assessing Officer for determination of the rate of tax at which tax is deductible on payment to the said Foreign Company.
The AAR rejected the application of the Foreign Company on the ground that the question raised is already pending before an income tax authority. Is the rejection of the application of the Foreign Company justified in law?
Question 6 (ID 06)
ABC Inc. a Non-resident investor Company is a beneficiary of a contributory trust established in India. The application for advance ruling u/s 245Q by ABC Inc. on a question affecting the trust involving, inter alia, provisions of Sections 161 to 164 is resisted by the Department on two grounds
This is a question which really affects the contributory trust in India, and that the applicant though a non-resident cannot avail the benefits of Chapter XIX-B for getting clarifications about a resident assessee’s liability to income-tax merely because they have some mutual connections;
Since the ruling given would bind only the applicant and the Department, any action at the time of assessment of the Indian trust cannot be questioned on the basis of the ruling and hence the ruling would be infructuous.
Discuss the pros and cons of the objections of the Department.
Question 7 (ID 07)
Mr. Kalpesh Sanghavi employed with a company, V, of the U.S.A. since May, 2002. He came to India for the first time on November 1 2010 year and was in India there after. An Indian company, VIPL, was promoted by V. In order to provide better access to technology and technical expertise to its people, VIPL decided to engage the services of the kalpesh sanghavi. He sought an advance ruling by an application dated March 30 for the question whether he will be technician and whether he would be entitled to exemption under section 10. After making the application to AAR he has filed return of income on March 31. You are required to answer whether application is maintainable.
Question 8 (ID 08) (Revision / Home work)
SAIL (steel authority of India Limited) a public sector undertaking filed the return of income claiming the deduction of section 80IA. Assessing officer has dis-allowed the claim made by the assessee. SAIL has preferred an appeal against the order of officer and is pending before Appellate tribunal as of 01-08-2018 and four hearings are already completed. However due to delay in decision SAIL prefers to make application to authority of advance ruling in lieu of appellate tribunal, appellate tribunal take it as content of court. You are required to offer your comments on the issue.
Question 9 (ID 09) (Revision / Home work)
Microsoft corporation supplied the software to MSRC ltd for the distribution in India. Software was supplied at 40 % discount on retail qutoe of the product. Similar product to Chunking corporation in china was supplied at 43 % discount on retail price. Microsoft corporation made application to AAR regarding Transfer pricing tax liability in India if any. AAR rejected the application. You are required to answer whether the action of AAR is justified.
Question 10 (ID 10) (Revision / Home work)
X & Co. filed an application for advance ruling for assessment years 2011-12, 2012-13 and 2013-14 with the Authority for Advance Ruling (AAR). For the assessment years 2011-12, 2012-13 notices section 143(2) were issued to the assessee and, subsequently, before the date of filing with AAR, notice under section 142(1) along with questionnaire was issued. For the assessment year 2013-14, notice under section 143(2) was issued before the date of filing of application with the AAR and notice under section 142(1) along with questionnaire was served on the assessee after the date of filing of application with AAR. Can the AAR reject the application on the ground that proceedings are already pending? Assume that the provisions relating to Advance Ruling for the earlier assessment years are the same as those prevailing for the assessment year