Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai
Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai
Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai
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AAR rul<strong>in</strong>g<br />
The AAR held that s. 115JA (ak<strong>in</strong> to s. 115JB) applied to every “company” to <strong>in</strong>clude a<br />
“foreign company”, there was no reason to presume that the legislature did not<br />
<strong>in</strong>tend s. 115JA to apply to a foreign company. This rul<strong>in</strong>g is not applicable because:<br />
(a)<br />
It was rendered <strong>in</strong> the case <strong>of</strong> an assessee who was carry<strong>in</strong>g out bus<strong>in</strong>ess and had<br />
a PE <strong>in</strong> India.<br />
(b) Its <strong>in</strong>come was be<strong>in</strong>g assessed under the head “<strong>in</strong>come from bus<strong>in</strong>ess and<br />
pr<strong>of</strong>ession”.<br />
(c)<br />
It was required to ma<strong>in</strong>ta<strong>in</strong> accounts under section 44AA <strong>of</strong> the IT Act and<br />
prepare accounts under ss. 591 & 594 <strong>of</strong> the Companies Act;<br />
(d) S. 591 <strong>of</strong> the Companies Act applies only to foreign companies who have<br />
established a place <strong>of</strong> bus<strong>in</strong>ess with<strong>in</strong> India and requires the preparation <strong>of</strong> a<br />
Balance Sheet and P&L A/c as per s. 594.<br />
(e)<br />
The obligation <strong>in</strong> s. 115JA(2) to prepare P&L Account <strong>in</strong> accordance with Parts II<br />
and III <strong>of</strong> Schedule VI can apply only to a foreign company which has a place <strong>of</strong><br />
bus<strong>in</strong>ess with<strong>in</strong> India.<br />
August, 2011<br />
CA Sanjeev Lalan, S<strong>in</strong>grodia Goyal & Co.<br />
Presentation at JB Nagar CPE Study Circle<br />
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