Wednesday, May 15, 2013

Resident or Not - an oft reiterated but 'finally settled' proposition, REVISITED yet again - IS IT NOT A TRAGEDY , IN A MANNER OF SPEAKING TRAVESTY OF JUSTICE, OR MORE APPROPRIATELY, IS AN ABUSE OF JUDICIAL PROCESS of its ilk?!

ICL (imp)

On Corp. Governance (an irresolute and obstinate topic, eluding any practical solution, for too long, but not for reasons not understandable !

<> Tentative:

It deserves to be specially noted , with an appreciative nod, that the concept chosen for an analytical study and deliberation among the invitee-experts is simply, RIGHTLY SO,- 'governance'; not with the usually prefixed yet another insurmountable concept namely, -'good'.

Merits an 'appreciative nod' is because, from a pragmatic viewpoint,what could be ideally expected, and at best hope to be achieved, if not ideologically,is, - 'governance'. 

One thinks that, once the primary obstacles (predominant being so called, corrupt mindset and practices) are, as far as feasible, clearly identified, and sincerely /whole heartedly taken on, and pursued, to the end of accomplishing the ultimate goal of 'governance', everything else could, as one imagines, be expected to follow / fall in line and place.

Pathetically, despite all talks and efforts towards that end, until now, seem to have failed to even take off.  The ostensible reason is that there is hardly any governance - not only in the corporate sector, but also in the national arena, supposed to be the venue for the overall governance of the entire nation.

(left unedited- open for law and other experts expected to partake in the announced project)

Rider (missing clue):

As the (s)age old saying, with in-depth wisdom, unequivocally proclaims, - charity begins (must begin!) at 'home'.

Naturally, likewise, any desire howsoever seroius it be, and motivation (attempt) howsoever overwelming it be, any exercise to reset own 'mind', for the profound  'good' of the rest, must necessarily begin only at 'individual'. That is possible through the unique and invisible exercise known as 'introspection'- howsoever difficult that may seem, to begin with.


www.taxmann.comWednesday, May 15, 2013
Taxmann Daily
A Tax & Corporate Laws Daily

Actual payment of tax isn’t a precondition to be a resident of partner country, as per India-UAE DTAA
As per Article 4(1) of India-UAE DTAA, to be a resident of contracting State, it isn’t necessary to pay tax there; mere right of contracting State to tax such person by reason of domicile, place of management or incorporation is sufficient
In the instant case, the assessee had challenged the section 40(a)(i) disallowance in respect of professional fee paid to ‘V’, sole proprietor of KPMG, Dubai. Assessee, contended that these payments were made in pursuance of professional services carried out by KPMG, Dubai as understood in Article 14 of the India-UAE treaty dealing with independent personal services. It was stated that the income was not chargeable to tax in India since ‘V’ was not in India for more than 183 days during the previous year and, therefore, the question of deduction of tax at source didn’t not arise. The AO, on the other hand, made disallowance on the footing that 'V' couldn’t take benefit of India-UAE treaty, as it couldn’t be treated as a resident of U.A.E. as per Article 4(1) of India-UAE DTAA, as he was not paying tax in U.A.E., which was confirmed by CIT(A). Aggrieved assessee filed the instant appeal.
The Tribunal held in favour of assessee as under:
1) Article 4(1) of India-UAE treaty provides that the term 'Resident' of a 'Contracting State' means any person, who, under the laws of that State (i.e. U.A.E.), is liable to tax therein by reason of his domicile, resident, place of management, place of incorporation, or any other criterion of similar nature. The term ‘liable to tax in the contracting State’ doesn’t necessarily imply that the person should actually pay the tax in that contracting State. Right to tax on such person is sufficient;
2) If a fiscal domicile of a person is in the contracting State, which in the present case has not been doubted was in U.A.E., then he was to be treated as resident of that contracting State irrespective of whether or not that person is actually liable to pay taxes in that country;
3) Liability to tax in the contracting State doesn’t imply that the person was actually liable to tax but would also cover the cases where the other contracting State has the right to tax such person. It is immaterial whether or not such right has been exercised. The basis for deducting the TDS under section 195 by the assessee for making the payment to 'V' was rejected. – KPMG v. JCIT [2013] 33 23 (Mumbai - Trib.)

KEY NOTE: May be facts and circyumstances are distinct- but can the settled principle of law be subjected to scrutiny , repeatedy, whatever be the whims and fancies of the Revenue/ or any of its 'officers' expected to simply follow such settled priciple of a rudimentary nature ?

Is this not an instance for the officer to be questioned why and how he shoulds beb regharded to have acted in the performance of his duties as envisaged by the law??

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