Kalpesh Classes

Representative Assessee, ​​ Agent of Non resident

Question 1 (ID 11 and 20 and 24) (Representative assessee)

A Firm of solicitors in Delhi engaged a​​ barrister of London for arguing a case before the Supreme Court in India. A payment of $ 50,000 was made to the barrister in London, according to the terms of the professional engagement. It is claimed that since the payment is made outside India, no tax​​ is payable on the fee paid. How should the Assessing Officer proceed in this matter ?

OR

C, a British barrister, was appointed by an English company to represent it in a patent case before the Delhi High Court. The High Court rules provided that an​​ advocate who is not a member of the Delhi Bar can address the court only through a member advocate. B, a member of Delhi Bar, was appointed to be the advocate on record. B briefed C regarding Indian precedents relating to the case. The English company paid​​ him a fee of Rs. 10,000 while C received in England a fee of $ 25,000. The Assessing Officer treated B as the agent of C under section 163 and taxed him in respect of $ 25,000. Comment on the actions of the Assessing Officer.​​ 

OR

'K' was a non-resident Indian. He purchased certain agricultural land in a village in India. The entire income from such land was spent by K's father 'S' for household expenses. So no part of the income was paid to ‘K’. How can the assessment be made by the assessing officer in respect of income from such land ? what are the rights and duties of “S” under the income tax act ?

Question 2 (ID 12 and 13) (Representative assessee) (Revision ​​ / Home work)

A Non-Resident Company purchases goods in India for the purpose of export and thereby earns profit. Examine the tax consequence of the above transaction.

OR

XY Pvt Ltd a Company having registered head office in Singapore for the first time had carried out operations during year of purchase of goods in India on four occasions. Immediately after the purchase the Company exported the same to China. The total value of such exports was Rs.100 ​​ Lakhs on which it earned profits of Rs. 20 Lakhs before the expenses of Rs. 12 Lakhs, which were directly paid by HO. Company seeks your advice to its​​ liability to tax in India.​​ 

OR

A foreign Company having no Indian citizen / resident of India as shareholder, has shot a TV film entirely on India locations. The film is to be telecast exclusively in the foreign countries. But it has also agreed with the​​ Government of India to give the right of telecast in India, free of charge. Discuss, giving reasons whether the above transaction will give rise to income which will be deemed to accrue or arise in India.

Question: 3 (ID 14) (Representative assessee)

X Co. Ltd is the Indian subsidiary of an American Company manufacturing and selling copier machines. The Indian Company among other things purchases and sells these copier machines also. Does any part of the profits on the sales of American Company to the Indian Company accrue or arise in India ? Discuss.

Question: 4 (ID 21) (Representative assessee)

During the previous year X exported tobacco to Japan and France where it was sold through non-resident assesses – A a Japanese company and B, a French concern. A​​ and B were operating as X’ s agents and were to be paid commission on sales effected through them. X received the entire sale proceeds in India. X made credit entries in his books of account in respect of commission payable to A and B and remitted the same to them subsequently. State whether A and B are chargeable to tax in respect of commission on the basis of receipt of income (actual or constructive in India and whether it can be said that they have received or are deemed to have received commission when their accounts were credited.

Question: 5 (ID 36) (Representative assessee) (Revision ​​ / Home work)

The procedure relating to the recovery of tax due or the arrears of taxes from a non – resident is different than the resident assessee. Comment and state how such recovery is to be made along with its limitation.

“Key​​ to​​ success​​ is​​ only​​ writing​​ practice.”

CA Kalpesh Sanghavi