14TH SURANA & SURA NA NATIONAL CORPORATE ... SURANA & SURA NA NATIONAL CORPORATE LAW MOOT COURT...

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016

BEFORE THE HONOURABLE HIGH COURT OF KARNATAKA

WP No.100000

Article 226 of the Indian Constitution, 1949

HASSLETON INVESTMENT LIMITED, SINGAPORE………..….PETITIONER

V.

THE AUTHORITY FOR ADVANCE RULING (INCOME TAX), NEW DELHI

……RESPONDENT 1

DIRECTOR OF INCOME- TAX(INTERNATIONAL TAXATION), BENGALURU

…..RESPONDENT 2

Most Respectfully Submitted

MEMORIAL ON BEHALF OF THE PETITIONER

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||i||

MEMORIAL ON BEHALF OF THE PETITIONERS

TABLE OF CONTENTS

Table of Contents ....................................................................................................................... i

Index of Authorities ................................................................................................................. iv

Treatises & Conventions .................................................................................................... iv

Indian Cases ........................................................................................................................ iv

International Cases ............................................................................................................. vi

Reports ................................................................................................................................. vi

Other Authorities ............................................................................................................... vii

List of Abbreviations .............................................................................................................. viii

Statement of Jurisdiction .......................................................................................................... x

Statement of Facts ................................................................................................................... xii

Questions Presented .............................................................................................................. xiii

Summary of Arguments .......................................................................................................... xv

Arguments Advanced ................................................................................................................ 1

ISSUE 1: Whether MAT provisions will be applicable to the Petitioner being a

‘Foreign Company’ as per the definition under Income Tax Act, 1961 and The

Companies Act, 2013. .......................................................................................................... 1

[1.1] ‘Foreign Company’ as per The Income Tax Act, 1961 ............................................. 1

[1.2] Interpretation Of Term ‘Company’ as appearing in Section 115JB .......................... 2

[1.3] Rule of Executive Interpretation ............................................................................... 2

[1.3.1] Legislative History of the MAT provision in the IT Act. .................................. 3

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||ii||


ISSUE 2: Whether The Petitioner Had Any Type Of Permanent Establishment /

Place Of Business / Business Connection Either Under Income Tax Act, Companies

Act Or Relevant Tax Treaty. .............................................................................................. 4

[2.1] HIL had no Permanent Establishment ....................................................................... 4

[2.2.1] The agents are acting in the ordinary course of their business ........................... 5

[2.2.2] There activities are not devoted wholly or almost wholly to the foreign

enterprise ........................................................................................................................ 6

[2.3] HIL Had No Place Of Business In India. .................................................................. 6

[2.4] HIL Had NO Business Connection In India .............................................................. 7

ISSUE 3: Whether the Petitioner is required to prepare financials as per Companies

Act, 2013................................................................................................................................ 7

[3.1.] Specific provisions for FPI’s for preparation of books of account .......................... 7

[3.2.] Legislative intent to exclude companies incorporated outside India with no PE in

India ................................................................................................................................... 8

ISSUE 4: Whether the Finance Act, 2015 amendment on imposition of MAT on

foreign company is prospective or retrospective ............................................................... 8

[4.1] Clarificatory Nature of the Amendment. ................................................................... 9

[4.2] Intent of the Legislature ............................................................................................ 9

[4.3.] Remedial nature of the Amendment....................................................................... 10

ISSUE 5: Whether capital gains exemption as per India – Singapore tax treaty will be

applicable to the Petitioner and whether imposition of MAT will be violative of the

tax treaty. ............................................................................................................................ 11

[5.1] Capital Gains Taxable only in Singapore ................................................................ 11

[5.2.] Imposition of MAT to violate Tax Treaty .............................................................. 11

[5.3] Section 115 JB and Section 10(38) of the Act ........................................................ 12

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||iii||


ISSUE 6: Whether the petitioner can cherry pick the provisions of Income Tax Act

and tax treaty for the purpose of definition of PE under the Act and capital gains

exemption under the tax treaty. ........................................................................................ 13

[6.1] Provision under Section 90(2) of the Act ................................................................ 13

[6.2] Article 51(1) of the Constitution of India 1949 ....................................................... 14

Issue 7: Whether 115JB is equally applicable to FIIs/FPIs and FDI and the scope and

nature of functioning of FIIs/FPIs and FDIs to understand the investment into India.

.............................................................................................................................................. 14

[7.1] Applicability of Section 115JB to FIIs/FPIs and FDIs ........................................... 15

[7.2] Scope and nature of functioning of FIIs/FPIs and FDIs ......................................... 15

Prayer ...................................................................................................................................... 16

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||iv||


INDEX OF AUTHORITIES

TREATISES & CONVENTIONS

Agreement for avoidance of double taxation and prevention of fiscal evasion with

Singapore”, 27th May, 1994Article 5.9 ................................................................................ 5

Agreement for avoidance of double taxation and prevention of fiscal evasion with

Singapore”, 27th May, 1994Article 5, paragraph 9 ............................................................... 4

Model Tax Convention (Condensed Version) – ISBN 978-92-64-08948-8 – OECD 2010 ...... 6

Model Tax Convention (Condensed Version) – ISBN 978-92-64-08948-8 –OECD 2010,para

38............................................................................................................................................ 6

United Nations Convention on Contracts for the International Sale of Goods, Article 26,

“Vienna Convention” 11th April 1980 ................................................................................. 13

INDIAN CASES

Ajay Kumar Banarjee and ors. v. Union of India AIR 1984 SC 1130 ...................................... 8

Assistant Commissioner of Income Tax v. Pride Foramer SAS (2008)116 TTJ (Delhi)369 ... 14

Bangalore Woollen, Cotton & Silk Mills Co. Ltd v. CIT [1950] 18 ITR 423 (Mad) ................. 7

Bank of Tokyo-Mitsubishi UFJ Ltd v. ADIT ITA Nos. 5364/Del/2010 ............................ 12, 14

Barendra Prasad Ray v. ITO1981 AIR 1047 ............................................................................ 5

Bhubaneswar Singh and Bilma Devi Poddar and Ors. v. Union Of India (1994) 6 SCC 77 .. 10

C.E.S.C. Ltd. v. Deputy Commissioner of Income Tax [2003]87ITD653(Cal),

(2003)80TTJ(Kol)806 .......................................................................................................... 13

Castleton Investment ltd. v Director of Income Tax (2015) 280 CTR 409 (SC) ..................... 15

CIT v. B.C. Srinivasa Shetty [1981]SCR (2) 938 ....................................................................... 2

CIT v. Evans Medical Supplies Ltd. [1959] 36 ITR 418 ........................................................... 7

CIT v. Vishakhapatnam Port Trust (1983), 144 ITR 146 (AP) ................................................. 4

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||v||


Commissioner Income Tax, Ahmedabad v. Gold Coin Health Private ltd, (2008) 9 SCC 622 . 9

Commissioner of Income Tax v. Podar cement (p) ltd (1997) 5 SCC 482 ................................ 9

Commissioner of Income Tax v. Vatika Township Private Limited (2015) 1 SCC 1 .............. 11

Commissioner of Income Tax, Bangalore v. B.C. Srinivasa Setty, (1981) 2 SCC 460 ............ 9

Commissioner of Income Tax, Ernakulam, Kerala v. Official Liquidator, Palai Central Bank

Ltd., (In Liquidation) (1985) 1 SCC 45 ................................................................................. 9

Dresdner Bank AG v. Additional Commissioner of Income Tax [2007] 108 ITD 375 (Mum) 12

Dun and Bradstreet Espana, SA, (272 ITR 99) ......................................................................... 5

Imperial Chit Fund (P) Ltd v. ITO (1996) 8 SCC 303 ............................................................... 2

In Re: Advance Ruling P .No .13 of 1995 (1997)141 CTR 542 (AAR) .................................. 14

In Re: Castleton Investment Ltd. [2012] 348 ITR 537 (AAR) ................................................ 10

In Re: ZD [2012] ITR 348 (AAR) ............................................................................................. 1

ITA Nos. 5364/Del/2010 and ITA Nos. 5104/Del/2011 decided on 19th September 2014 ...... 2

Jethabhai Javeribhaiv. CIT [1951] 20 ITR 331 (Nag) .............................................................. 7

Kerala SIDC v. CIT, [2003] 259 ITR 51 (SC) ........................................................................... 2

Kerala State Industrial Development Corp. Ltd. v. CIT [2003] 259 ITR 51 (SC) .................... 3

Kerala State Industrial Development Corp. Ltd. v. CIT [2010] 236 CTR 377 9 (Ker) ........... 12

LG Asian Plus Ltd v. Asst. Director of Income Tax 46 SOT 159 ITAT, Delhi Bench ........... 13

Madras v. Fraser and Ross and Anr. [1960] AIR 971 .............................................................. 1

Mahindra and Mahindra Limited v. The Dy. Commissioner of Income Tax [2009]30 SOT374

(Mum) .................................................................................................................................. 11

Narain Swadeshi Weaving Mills v. Cept (1954) 26 ITR 772 (SC) ............................................ 5

Platinum Asset Management Ltd. v Dy. Director of Income Tax, [2014] 61 SOT 119(Mum) 10

Praxiar Pacific Ltd. v. DIT [2010] 326 ITR 276 (AAR) ................................................... 10, 12

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||vi||


Premier Enterprises, Secundrabad v. Commercial Tax officer and Another AIR 2003 SC

4449...................................................................................................................................... 10

R.B Jodha Mai Kuthiala v. Commissioner of Income-Tax, Punjab, Jammu & Kashmir and

Himachal Pradesh[1971] 82 ITR 570 (SC) ......................................................................... 10

Sheraton International Inc. v. Deputy Director of Income Tax [2006]10 SOT 542 (Delhi) ... 14

Suresh N. Gupta v. Commissioner of Income Tax (2008) 4 SCC 362 .................................... 11

The Commissioner of Income Tax v. Al-Kabeer Exports Ltd. (2010)233CTR (Bom) 443 ..... 12

The J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. The State of Uttar Pradesh and Ors

AIR 1961 SC 1170 ................................................................................................................. 8

The Vanguard Fire and General Insurance Co. Ltd.................................................................. 1

Timken Co. v. DIT [2010] 326 ITR 193 (AAR) ................................................................ 10, 12

Vodafone International Holdings B.V. v. Union of India & Anr. (2012) [S.L.P. (C) No.

26529] .................................................................................................................................... 9

Zile Singh v. State of Haryana and ors.2004 8 SCC 1 ............................................................ 10

INTERNATIONAL CASES

Lord Advocate v. Huron and Erie Loan and Saving Co.1911 Scottish Cases 612.................... 6

Rogers v. United States, (1902) 185 U.S. 83 ............................................................................. 8

Wyre Forest District Council v. Secretary of State for the Environment [1990] 2 AC 357

(HL)........................................................................................................................................ 1

REPORTS

Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for

the period prior to 01.04.2015 ............................................................................................. 15


the period prior to 01.04.2015, p.42, Para 5.1.3 .................................................................... 2

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||vii||



the period prior to 01.04.2015.p.63, para 5.8.4 ................................................................... 13


the period prior to 01.04.2015p.51, Para 5.1.25 .................................................................... 4

Justice AP Shah, Report:Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for

the period prior to 01.04.2015,p.51, Para 5.1.24 ................................................................... 3

OTHER AUTHORITIES

Budget Speech of Minister of Finance for 2000-01 – Part B, [2000] 242 ITR (St.) 18, 29,

Explanatory. Memorandum to the Finance (No.2) Bill, 1996, 220 ITR (St.) 248, 263-264 12

Budget Speech of Prime Minister and Minister of Finance for 1987-88 – Part B, [1987] 165

ITR (St.) 13, 14 ...................................................................................................................... 3

CBDT circular, 2nd September, 2015 ....................................................................................... 15

CBDT press release, 24th September, 2015 ............................................................................. 15

JUSTICE G.P SINGH, (Sixth Edn, 1996) “PRINCIPAL OF STATUTORY

INTERPRETATION.”....................................................................................................... 9, 10

Memorandum Explaining the provisions of the Finance Bill,[2012] 342 ITR (St.) 234, 238-

240.......................................................................................................................................... 3

Notes on Clauses, Finance Bill 2002, [2002] 254 ITR (St) 118, 151 ........................................ 3

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||viii||


LIST OF ABBREVIATIONS

AAR Authority for Advanced Ruling

AIR All India Reporter

All Allahabad

AO Assessing Officer

AT Appellate Tribunal

AY Assessing year

BIT Bilateral Investment Treaty

Cal. Calcutta

CBDT Central Board of Direct Taxes

CFC Controlled Foreign Corporations

CIT Commissioner of Income Tax

CIT(A) Commissioner of Income Tax (Appeals)

CTR Current Tax Reporter

CUP Comparable Uncontrolled Price

DCF Discount Cash Flow

DCIT Deputy Commissioner of Income Tax

Del. Delhi

DIT Director Income Tax

DTAA Double Taxation Avoidance Agreement

DTC Direct Taxes Code

Edn. Edition

GAAR General Anti Avoidance Rule

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||ix||


HC High Court

HIL Hassleton Investment Limited

IT Income Tax

ITAT Income Tax Appellant Tribunal

ITD Income Tax Decisions

ITR Income Tax Reports

LTCG Long Term Capital Gains

Mad. Madras

MAT Minimum Alternate Tax

OECD Organisation for Economic Co-operation and

Development

p. Page Number

r/w Read with

Re Reference

S Section

SAIL Securities Advisers India Limited

SC Supreme Court

SCC Supreme Court Cases

SEBI Securities Investment Board of India

u/s Under Section

UK United Kingdom

USA United States of America

v. Versus

Vol. Volume

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||x||


STATEMENT OF JURISDICTION

This Hon’ble High Court of Karnataka has the jurisdiction to try and dispose of the instant

matter under Article 226 of the Constitution of India 1949, which states that

“(1) Notwithstanding anything in Article 32 every High Court shall have powers,

throughout the territories in relation to which it exercise jurisdiction, to issue to any person

or authority, including in appropriate cases, any Government, within those territories

directions, orders or writs, including writs in the nature of habeas corpus, mandamus,

prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of

the rights conferred by Part III and for any other purpose

(2) The power conferred by clause (1) to issue directions, orders or writs to any

Government, authority or person may also be exercised by any High Court exercising

jurisdiction in relation to the territories within which the cause of action, wholly or in part,

arises for the exercise of such power, notwithstanding that the seat of such Government or

authority or the residence of such person is not within those territories

(3) Where any party against whom an interim order, whether by way of injunction or stay

or in any other manner, is made on, or in any proceedings relating to, a petition under

clause (1), without

(a) furnishing to such party copies of such petition and all documents in support of the

plea for such interim order; and

(b) giving such party an opportunity of being heard, makes an application to the High

Court for the vacation of such order and furnishes a copy of such application to the party

in whose favour such order has been made or the counsel of such party, the High Court

shall dispose of the application within a period of two weeks from the date on which it is

received or from the date on which the copy of such application is so furnished, whichever

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||xi||


is later, or where the High Court is closed on the last day of that period, before the expiry

of the next day afterwards on which the High Court is open; and if the application is not so

disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the

expiry of the aid next day, stand vacated

(4) The power conferred on a High Court by this article shall not be in derogation of the

power conferred on the Supreme Court by clause (2) of Article 32”

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||xii||


STATEMENT OF FACTS

In the present controversy Hassleton Investment Limited (HIL) a company registered in

Singapore and FPI as per Foreign Portfolio Investors Regulations, 2014 engaged services of

Securities Advisors India Ltd (SAIL). On offloading the securities( in case of short term

capital gains),covered u/s 115AD of Income Tax Act, 1961 and long term capital gains

availed exemption u/s 10(38) of the Act & paid Securities Transaction Tax(STT). In January

sold major Investments, and paid STT since gains were LTCG, assumed exemption u/s

10(38) of the Act. The ITD appeared before the AAR stating that HIL’s case was covered by

rulings in The Timken Company Case(2010)326 ITR 193(AAR) and Praxair Pacific Limited

CASE(2010)326 ITR 276(AAR). The ITD maintained that SAIL was the key advisor of HIL

hence its Permanent Establishment i.e. Agency PE in India therefore required to pay MAT u/

s 115 JB of the Act on the total income of HIL. HIL argued that SAIL was not its Agency PE

neither did have fixed place of business, hence not required to prepare its financials as per the

Companies Act 1956/2013.

ITD was of the view that amendment to S.115JB by the FA 2015 was prospective and HIL

was covered prior to the amendment, within the ambit of MAT and that ‘company’ in

S.115JB(1) covered foreign companies, hence required to prepare financials as per

Companies Act 2013. Stated HIL-SAIL are Principal-Agent; hence SAIL was HIL’s Agency

PE. Also, entire capital gains was taxable in Singapore- Article 13(4) of India – Singapore tax

treaty, imposition of MAT violate treaty obligations. The AAR held it had an Agency PE in

India -liable to pay MAT u/s 115JB for FY 2014-15. Further definition of ‘foreign company’

to be borrowed from Companies Act, 2013 and HIL had a place of business in India through

SAIL. HIL filed writ petition of Certiorarified Mandamus under Article 226 of the Indian

Constitution to quash passed by AAR and to prevent ITD from any recovery proceedings.

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||xiii||


QUESTIONS PRESENTED

ISSUE 1

Whether MAT provisions will be applicable to the petitioner being a ‘foreign company’

as per the definition under Income Tax Act, 1961 and the Companies Act, 2013.

ISSUE 2

Whether the petitioner had any type of Permanent Establishment / Place of Business

/Business Connection either under Income Tax Act, Companies Act or relevant tax

treaty.

ISSUE 3

Whether the petitioner is required to prepare financials as per Companies Act, 2013 or

whether it is governed by SEBI Regulations.

ISSUE 4

Whether the Finance Act, 2015 amendment on imposition of MAT on foreign company

is prospective or retrospective as argued by both parties.

ISSUE 5

Whether capital gains exemption as per India –Singapore tax treaty will be applicable

to the petitioner and whether imposition of MAT will be violative of the tax treaty.

ISSUE 6

Whether the petitioner can cherry pick the provisions of Income Tax Act and tax treaty

for the purpose of definition of PE under the Act and capital gains exemption under the

tax treaty.

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||xiv||


ISSUE 7

Whether 115JB is equally applicable to FIIs/FPIs and Foreign Direct Investors (FDI)

and the scope and nature of functioning of FIIs/FPIs and FDIs to understand the

investment into India.

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||xv||


SUMMARY OF ARGUMENTS

ISSUE 1:

HIL being a ‘foreign company’ falls within the definition of the IT Act and the legislature

never intend the MAT provisions to apply on a foreign company.

ISSUE 2:

HIL did not have a Permanent business Establishment /place of business or Business

connection in India as SAIL was as an independent agent.

ISSUE 3:

HIL, is not to prepare financials as per Companies Act, 2013 as HIL is governed by the

specific provisions of SEBI (FPI) guidelines, 2015 and has no agency PE in India.

ISSUE 4:

The amendment proposed by Financial Act, 2015 is to be held retrospectively, as it is a

Clarificatory Amendment and legislature never intended it to apply prospectively and the

amendment is remedial in nature

ISSUE 5:

Article 13(4) of the Tax Treaty shall be applicable hence imposition of MAT shall be

violative of the tax treaty.

ISSUE 6:

Under Section 90(2) of the Income Tax Act, 1961 the beneficial provisions can be cherry

picked.

ISSUE 7:

Section 115JB of the Income Tax Act, 1961 will not apply to FPI/FII/FDI as it has been

clearly propounded by the CBDT press release 2014.

14TH SURANA & SURANA NATIONAL CORPORATE LAW MOOT COURT COMPETITION, 2016 ||1||


ARGUMENTS ADVANCED

ISSUE 1: WHETHER MAT PROVISIONS WILL BE APPLICABLE TO THE PETITIONER BEING A

‘FOREIGN COMPANY’ AS PER THE DEFINITION UNDER INCOME TAX ACT, 1961 AND THE

COMPANIES ACT, 2013.

It is humbly contended before the Hon’ble Court that the order passed by Authority of

Advance Ruling (hereinafter referred to as ‘AAR’) is erroneous in concluding that Hassleton

Investment Ltd. (hereinafter referred as ‘HIL’) is liable u/s 115JB as HIL being a ‘foreign

company’ falls within the definition of the Income Tax Act (hereinafter referred as ‘Act’)

[1.1] MAT provision u/s.115 JB is inapplicable to foreign companies. [1.2] as the legislature

never intended that. [1.3]

[1.1] ‘FOREIGN COMPANY’ AS PER THE INCOME TAX ACT, 1961

“Company” u/s. 115JB is the overriding charging provision as it provides for payment of

income-tax. So there is no need of borrowing the definition of “company” from S. 2(42) of

the Companies Act, 2013; as the act is a complete code in itself and defines foreign

company.1 A word already defined in the interpretation clause, prima facie, governs

whenever that word is used in the body of the statute.2 If Parliament in a statutory enactment

defines its terms, it must intend that, in the absence of a clear indication to the contrary, those

terms as defined shall govern what is proposed, authorized or done under or by reference to

that enactment.3.Thus, the definition of the Company from the Companies Act need not be

referred.

1 In Re: ZD [2012] ITR 348 (AAR).

2The Vanguard Fire and General Insurance Co. Ltd., Madras v. Fraser and Ross and Anr. [1960] AIR 971.

3Wyre Forest District Council v. Secretary of State for the Environment [1990] 2 AC 357 (HL).



[1.2] INTERPRETATION OF TERM ‘COMPANY’ AS APPEARING IN SECTION 115JB

The definition of company is qualified with expression ‘unless the context otherwise

requires’, which makes it clear that the definition is subject to an overall restrictive clause

stated in this section.4 Thus if the definition of company is applied without considering the

opening statement stated in S. 2, S.115JB would become unworkable. As per the bare reading

of Section 115JB it is clear that for calculation of ‘Book Profit’ every company has to prepare

the profit and loss in accordance with the provisions of Schedule VI of the Companies Act,

1956. Implying that a foreign company has to recast its entire global accounts in the manner

prescribed by the Act which is a colossal task because ‘Foreign Company’ is defined in S.

2(17).For the purpose of the adjustments as provided in the explanation to S. 115JB for the

computation of the ‘Book Profit’. A foreign company may end up paying the tax on its entire

global income which may not have been accrued/ arisen or received in India. Since there is an

absence of procedure for computation of “Book Profit’ in case of foreign companies.

[1.3] RULE OF EXECUTIVE INTERPRETATION

The legislative intent shall be relevant to clear the inconsistency and ambiguity in the

applicability of MAT provisions.5 Legislative intent should be taken into account in case of

ambiguity6

Minimum Alternate Tax was effectively introduced in India in order to tax ‘Zero Tax

Companies’ since then there have been various amendments in this provision and it has been

reintroduced several times.7 Subsequently it was reintroduced as Section 115 JB in year 2001

and has been recently amended by Finance Act of 2015, which levies 18.5% MAT on

4CIT v. B.C. Srinivasa Shetty [1981]SCR (2) 938.

5 ITA Nos. 5364/Del/2010 and ITA Nos. 5104/Del/2011 decided on 19th September 2014.

6Kerala SIDC v. CIT, [2003] 259 ITR 51 (SC); Imperial Chit Fund (P) Ltd v. ITO (1996) 8 SCC 303.

7 Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015, p.42, Para 5.1.3.



companies if the tax payable the companies on their taxable income is less than 18.5% of its

book profit, considering the book profit as its total income.

[1.3.1] Legislative History of the MAT provision in the IT Act.

While explaining the purpose of inserting MAT provisions in the IT Act for the first time

Finance minister had made it clear that only the domestically widely held company will pay

tax at a specified rate on their book Profit.8 Further, the notes on clauses explaining the

provisions of Finance bill, 2002, providing for amendments to S. 115JB stated that the

existing provisions of the said Section provide for ‘levy of a minimum tax on domestic

companies’ on the book profit.9 Memorandum of the Finance bill 201210 stated that in order

to align the provisions of the Income tax Act with the Companies Act, it is proposed to

amend S. 115JB to the provide that companies which are covered u/s 211 to be included by

Explanation 3 which is added to S. 115JB and are suppose to prepare their Profit & Loss

account as per Schedule VI of the Companies Act. This amendment makes it clear that the

obligation is only because of its regulatory requirements and not because of its independent

nature. Thus in the present matter if the legislature intended on including the FPI/FII it would

have clarified itself.11

Thus it is humbly submitted before the Hon’ble court that court that the legislature never

intended to apply S. 115 JB (MAT) to be applicable to the foreign Company12 was made

clear by the Finance minister in his speech, the rates discussed were always meant to be

8 Budget Speech of Prime Minister and Minister of Finance for 1987-88 – Part B, [1987] 165 ITR (St.) 13, 14

9 Notes on Clauses, Finance Bill 2002, [2002] 254 ITR (St) 118, 151

10 Memorandum Explaining the provisions of the Finance Bill,[2012] 342 ITR (St.) 234, 238-240

11Justice AP Shah, Report:Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015,p.51, Para 5.1.24.

12Kerala State Industrial Development Corp. Ltd. v. CIT [2003] 259 ITR 51 (SC);



aligned to domestic companies and the obligation u/s 115JB (2) does not exist de hors the

Companies Act.13

ISSUE 2: WHETHER THE PETITIONER HAD ANY TYPE OF PERMANENT ESTABLISHMENT /

PLACE OF BUSINESS / BUSINESS CONNECTION EITHER UNDER INCOME TAX ACT,

COMPANIES ACT OR RELEVANT TAX TREATY.

It is humbly contended before the Hon’ble court that the ruling of AAR in considering SAIL

as an Agency of HIL and considering that HIL had a Permanent business Establishment in

India is an erroneous decision as SAIL had no permanent establishment and was an

independent agent [2.1] either had no place of business[2.2] or business connection.[2.3]

[2.1] HIL HAD NO PERMANENT ESTABLISHMENT

Permanent Establishment as defined in the Act includes a fixed place of business through

which the business of the enterprise is wholly or partly carried on. It postulates the existence

of a virtual projection of the foreign enterprise of one country onto the soil of another

country.

Here HIL and SAIL are two separate entities where HIL is a tax resident of Singapore, while

SAIL an Indian company deals with the advisory function regarding the investments in the

Indian market. Thus in no way SAIL could be considered as a virtual Projection of HIL or as

Fixed Place of Business in India as per The Income Tax Act14.

ARGUENDO:

The words “Permanent Establishment” as stated in Article 5 of the India Singapore DTAA15

defines the existence of a sizeable element of an permanent nature of a foreign enterprise in

13Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015p.51, Para 5.1.25.

14CIT v. Vishakhapatnam Port Trust (1983), 144 ITR 146 (AP)

15“Agreement for avoidance of double taxation and prevention of fiscal evasion with Singapore”, 27th May, 1994Article 5, paragraph 9.



another, which can be considered as a fixed place of business in that country.16 In the present

matter AAR has concluded that HIL had a Permanent establishment in India as SAIL acted as

its Agency PE for all its business in India; therefore it would be liable to pay MAT. SAIL in

the present matter has been only acting in the capacity of an ‘independent agent’ to HIL.

Article 5, Para 9 of the India-Singapore DTAA lays down two conditions which are required

to be satisfied in order to consider an agent as an independent agent: 2.2.1 Acting in the

ordinary course of his business, 2.2.2 Activities should not be devoted wholly or almost

wholly on behalf of the foreign enterprise.17

[2.2.1] The agents are acting in the ordinary course of their business

The words "ordinary course of their business" in Article 5 paragraph 9 clearly means that the

agent’s activity constituted his regular business. Business connotes some real, substantive and

systematic course of activity or conduct with a set purpose.18 It is the fundamental idea of

continuous exercise of an activity carried on continuously and systematically by a person by

the application of his labor and skill with a view to earning income. SAIL is a company

registered in India, provided advisory services to its clients about investment in Indian

Market. HIL (FPI) invested in India with the advice provided by SAIL and paid a huge

commission fees to SAIL every year.19

16Dun and Bradstreet Espana, SA, (272 ITR 99)

17“Agreement for avoidance of double taxation and prevention of fiscal evasion with Singapore”, 27th May, 1994Article 5.9.

18Narain Swadeshi Weaving Mills v. Cept (1954) 26 ITR 772 (SC)

19Barendra Prasad Ray v. ITO1981 AIR 1047



[2.2.2] There activities are not devoted wholly or almost wholly to the foreign

enterprise

An enterprise is said to be acting in the ordinary course of business if it performs activities

which makes it economically and legally, belong to the sphere of its ordinary course of

business.

As an investment advisory firm SAIL is typically responsible to his client (HIL) for the

results of it’s work but is not subject to significant control with respect to the manner in

which that work is carried out. It is not subjected to detailed instructions from the principal as

to the conduct of the work. The fact that the HIL is relying on the special skill and knowledge

of the SAIL is an indication of independence.20

[2.3] HIL HAD NO PLACE OF BUSINESS IN INDIA.

“Place of Business” covers any premises, facilities or installations used for carrying on

business of the enterprise whether or not they are used exclusively for that purpose. This may

be the case where foreign enterprises have certain premises or a part thereof owned by the

other enterprise to their disposal.21 SAIL was only providing the advisory help in the capacity

of an independent agent and was under no capacity to conclude contracts on behalf of HIL.22

Thus HIL has no office or employees in India, and carry out the decision making activities

outside India and is not required to prepare or maintain books of account separately as per

Schedule VI of the Companies act. The SEBI regulations for FPI which merely prescribes the

information to be maintained by FPIs with respect to the trade engaged in India.

20 Model Tax Convention (Condensed Version) – ISBN 978-92-64-08948-8 –OECD 2010,para 38.

21 Model Tax Convention (Condensed Version) – ISBN 978-92-64-08948-8 – OECD 2010.

22 Lord Advocate v. Huron and Erie Loan and Saving Co.1911 Scottish Cases 612.



[2.4] HIL HAD NO BUSINESS CONNECTION IN INDIA

The term Business Connection (hereinafter referred as ‘BC’) as refereed in the Act states that

any income earned directly or indirectly, through or from any BC in India would be deemed

to accrue and arise in India and would be taxable in India.23 The section specifically provides

that such a business connection shall not include any business activity carried out through a

broker, general commission agent or any other agent having an independent status24 In the

matter at hand, SAIL provided only advisory services to HIL in the capacity of an

independent agent and was not wholly or mainly working for it or was in the control of HIL

as has been established previously.

Thus it is humbly submitted before this Hon’ble court that the SAIL does not constitute a

business Connection, Place of business or Permanent establishment of HIL as it is merely

acting in the capacity of an independent agent.

ISSUE 3: WHETHER THE PETITIONER IS REQUIRED TO PREPARE FINANCIALS AS PER

COMPANIES ACT, 2013

It is humbly contended before the Hon’ble Court that based on the facts and circumstances of

the case, AAR was erroneous in holding HIL to prepare Financials as per Companies Act,

2013 as they are governed by the specific provisions of SEBI [3.1] and had no PE in India

[3.2].

[3.1.] SPECIFIC PROVISIONS FOR FPI’S FOR PREPARATION OF BOOKS OF ACCOUNT

HIL is a FPI registered under SEBI (FPI) Regulations, 2014.25 SEBI (FPI) Regulations 2014,

S.30 Chapter V, state the need to maintain books of accounts as per the guidelines mentioned

23 CIT v. Evans Medical Supplies Ltd. [1959] 36 ITR 418; Jethabhai Javeribhaiv. CIT [1951] 20 ITR 331 (Nag).

24Bangalore Woollen, Cotton & Silk Mills Co. Ltd v. CIT [1950] 18 ITR 423 (Mad).

25Factual Matrix, para 2.



under it26. The existence of specific provisions for FPI clearly ensures that there is no need to

make accounts as per Companies Act, 2013. This holds validity due to the Latin expression27

“Generalia Specialibus Non Derogant” i.e. general law yields to specific law.28

[3.2.] LEGISLATIVE INTENT TO EXCLUDE COMPANIES INCORPORATED OUTSIDE INDIA WITH

NO PE IN INDIA

A foreign company with a “place of business” in India has to prepare balance sheet and profit

and loss account in accordance with the provisions of the Act29. Foreign companies are

defined as companies with a place of business and conducting business activity in India and

are required to make out a balance sheet and profit and loss account in the prescribed

format.30 Since, HIL is a company incorporated in Singapore, with no Agency PE in India, it

does not have to prepare its financial statement as per the Companies Act, 2013.

Thus it is humbly submitted before the Hon’ble Court that due to the existence of specific

laws, which preside over general law, HIL being a FPI requires to make accounts as per SEBI

(FPI) Regulations, 2014.

ISSUE 4: WHETHER THE FINANCE ACT, 2015 AMENDMENT ON IMPOSITION OF MAT ON

FOREIGN COMPANY IS PROSPECTIVE OR RETROSPECTIVE

It is humbly contended before the Hon’ble Court that the Finance Act, 2015 amendment on

imposition on foreign companies is retrospective in nature as it is clarificatory in nature [4.1],

the legislature never intended to apply MAT to FPI’s [4.2]and remedial nature of the

amendment [4.3]

26 Section. 30 of SEBI (FPI) regulations, 2014.

27Rogers v. United States, (1902) 185 U.S. 83.

28The J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. The State of Uttar Pradesh and Ors AIR 1961 SC 1170; Ajay Kumar Banarjee and ors. v. Union of India AIR 1984 SC 1130.

29 S.591 r/w S.594 of Companies Act, 2013.

30 S. 2(42) r/w S.381 of Companies Act 2013.



[4.1] CLARIFICATORY NATURE OF THE AMENDMENT.

The Hon’ble Apex Court held that a clarificatory/declaratory amendment has retrospective

effect.31 It means “Amendments to remove doubts existing as to the common law, or the

meaning or effect of any statute”32 S. 115JB(2), a computation provision of MAT mandates

preparation of profit and loss accounts as per Part II Schedule VI of the Companies Act, 1956

and imposes obligations u/s. 210 of the Companies Act, 1956. As proved in Issue No. 3, FPIs

and FIIs are not bound to prepare financials as per the Companies Act, 2013 i.e. do not fall

under the computation provision.33 In order to resolve this conflict, the Finance Act

amendment of 2015 excluded the capital gains made by a foreign company by sale of

securities from the ambit of MAT. As stated above, for an amendment to be clarificatory in

nature, it has to remove the existing doubts and ambiguities present in the law. It is evident

that by introduction of the amendment a conflicting position of law is being elucidated.

Therefore, the amendment can be considered as clarificatory in nature.

[4.2] INTENT OF THE LEGISLATURE

The Act provides for a separate scheme34 for taxing income of FIIs / FPIs from Indian

securities at concessional rates for encouraging FDI. Income earned by FIIs / FPIs from their

Indian securities are treated as “capital gains”, instead of “business profits”, and are taxed

according to the nature of gains under the scheme.35 However, application of MAT Provision,

would render the separate scheme for FIIs / FPIs under the Act redundant. And, Legislature

31Commissioner of Income Tax v. Podar cement (p) ltd (1997) 5 SCC 482; Commissioner Income Tax, Ahmedabad v. Gold Coin Health Private ltd, (2008) 9 SCC 622; Vodafone International Holdings B.V. v. Union of India & Anr. (2012) [S.L.P. (C) No. 26529].

32JUSTICE G.P SINGH, (Sixth Edn, 1996) “PRINCIPAL OF STATUTORY INTERPRETATION.”

33Commissioner of Income Tax, Ernakulam, Kerala v. Official Liquidator, Palai Central Bank Ltd., (In Liquidation) (1985) 1 SCC 45; Commissioner of Income Tax, Bangalore v. B.C. Srinivasa Setty, (1981) 2 SCC 460.

34 S.115 AD, The Income Tax Act, 1961.

35 Ibid.



never intended for one section of the legislation to contradict another36. If a particular income

is governed under Section 115AD of the Income Tax Act, it would be governed by the

prescription of that section alone37. Accordingly, the MAT Provision would not apply to FIIs

/ FPIs and they would continue to be governed under the separate scheme provided under the

Act.

[4.3.] REMEDIAL NATURE OF THE AMENDMENT

Justice GP Singh opined the following with respect to remedial nature of an amendment:

“The usual reason of passing a declaratory amendment is to set aside what

Parliament deems to have been a judicial error, whether in the statement of

common law or in the interpretation of the statute.”38

A proviso, which is inserted to remedy unintended consequences of the legislature and to

make the provision workable, requires to be treated as retrospective in operation so that a

reasonable interpretation can be given to the section as a whole39. There was an existence of

ambiguity in law regarding the application of MAT to FPI’s. Timken case40 and Praxir case41

clearly stated that only FPI’s with a PE in India were liable to pay MAT. The Castleton

Investment Ltd case42 however, without overruling the previous judgments’ stated that FPI’s

have to pay MAT regardless they have a PE or not. The amendment was inserted to remedy

36Bhubaneswar Singh and Bilma Devi Poddar and Ors. v. Union Of India (1994) 6 SCC 77.

37Platinum Asset Management Ltd. v Dy. Director of Income Tax, [2014] 61 SOT 119(Mum).

38JUSTICE G.P SINGH, (Sixth Edn, 1996) “PRINCIPAL OF STATUTORY INTERPRETATION.”

39R.B Jodha Mai Kuthiala v. Commissioner of Income-Tax, Punjab, Jammu & Kashmir and Himachal Pradesh[1971] 82 ITR 570 (SC) ; Zile Singh v. State of Haryana and ors.2004 8 SCC 1; Premier Enterprises, Secundrabad v. Commercial Tax officer and Another AIR 2003 SC 4449.

40 Timken Co. v. DIT [2010] 326 ITR 193 (AAR)

41 Praxiar Pacific Ltd. v. DIT [2010] 326 ITR 276 (AAR)

42 In Re: Castleton Investment Ltd. [2012] 348 ITR 537 (AAR) ;



this ambiguity in law, hence it will be considered retrospective in nature. Doctrine of

fairness43 held that legislation, conferring benefit, to be construed as retrospective44.

Thus, it is humbly submitted before the Hon’ble Court that the amendment was clarificatory

in nature, to remedy unintended consequences and the legislature never intended to impose

MAT hence, is retrospective in nature.

ISSUE 5: WHETHER CAPITAL GAINS EXEMPTION AS PER INDIA – SINGAPORE TAX TREATY

WILL BE APPLICABLE TO THE PETITIONER AND WHETHER IMPOSITION OF MAT WILL BE

VIOLATIVE OF THE TAX TREATY.

It is humbly contended before the Hon’ble Court that capital gains exemption under Article

13(4) of the Double Tax Avoidance Agreement[5.1] (hereinafter referred to as DTAA) deems

imposition of MAT u/s 115 JB violative of the exemption provided by the tax treaty[5.2].

Moreover, S.10 (38) covers the income arising from capital gains thereby, S.115 JB shall not

be applicable [5.3]

[5.1] CAPITAL GAINS TAXABLE ONLY IN SINGAPORE

The DTAA under Article 13(4) provides for taxation of capital gains in country of

incorporation of the foreign company. The Article mentions that the gains derived by a

resident of a Contracting State from the alienation of any property are taxable only in that

State45. As proved in Issue 2, the petitioner does not have a permanent establishment in India

and hence shall not be liable to pay MAT.

[5.2.] IMPOSITION OF MAT TO VIOLATE TAX TREATY

MAT, was introduced to tax “zero tax companies” preventing them from avoiding tax on

43 Suresh N. Gupta v. Commissioner of Income Tax (2008) 4 SCC 362

44Commissioner of Income Tax v. Vatika Township Private Limited (2015) 1 SCC 1

45Mahindra and Mahindra Limited v. The Dy. Commissioner of Income Tax [2009]30 SOT374 (Mum).



profits and dividends.46 Budget speech of 1987 referred to “domestic companies” for

applicability of MAT, signifying exclusion of foreign companies from imposition of MAT.47.

Legislative intent indicates imposition of MAT on companies with PE in India.48 In Bank of

Tokyo-Mitsubishi UFJ Ltd49 ITAT held MAT provisions don’t apply to foreign companies

per se, the AAR in Timken and Praxair Pacific Ltd.50 held MAT applicable to foreign

companies with PE in India. S.115JB requires companies to prepare profit and loss account in

accordance with Companies Act, 1956 as mentioned in Issue 3, mandating foreign company

to prepare global accounts in accordance the Companies Act 1956, net profits disclosed by

the global profit & loss account is to be considered, foreign company becomes liable to pay

income-tax on its entire global income, notwithstanding its accrual in India. In the absence of

definite guidance with regards to the computation of book profits in the case of foreign

companies in the statue, evidently signifying the want of Legislative intent to make foreign

companies chargeable to MAT.51

[5.3] SECTION 115 JB AND SECTION 10(38) OF THE ACT

S.10(38) of the Act reads that income arising from transfer of securities long term capital

asset, is chargeable to securities transaction tax provided that the same by way of long term

capital gain is taken into account in computing book profit and income tax payable under

section 115JB. The proviso to Section 10(38) signifies adding long-term capital gains while

computing book profits u/s 115 JB(2). Moreover, for attracting proviso to Section 10(38),

46 Budget Speech of Minister of Finance for 2000-01 – Part B, [2000] 242 ITR (St.) 18, 29, Explanatory. Memorandum to the Finance (No.2) Bill, 1996, 220 ITR (St.) 248, 263-264.

47Kerala State Industrial Development Corp. Ltd. v. CIT [2010] 236 CTR 377 9 (Ker).

48The Commissioner of Income Tax v. Al-Kabeer Exports Ltd. (2010)233CTR (Bom) 443.

49 Bank of Tokyo-Mitsubishi UFJ Ltd v. ADIT ITA Nos. 5364/Del/2010.

50 Timken Co. v. DIT [2010] 326 ITR 193 (AAR); Praxiar Pacific Ltd. v. DIT [2010] 326 ITR 276 (AAR)

51Dresdner Bank AG v. Additional Commissioner of Income Tax [2007] 108 ITD 375 (Mum)



company must be covered u/s 115JB. Similarly, in LG Asian Plus Ltd v. Asst. Director of

Income Tax,52 it was held tax on income from the transfer of securities by an FPI should be

charged on the income arising from the transfer of such securities.

Therefore, it is humbly submitted before the Hon’ble Court, in the presence of DTAA

exemption the MAT provisions are inapplicable, regardless of the interpretation given to

Section 115 JB of the Act.53 Sustaining the principles of pacta sunt servanda (agreements

must be honoured)54 and good faith, the capital gains exemption as per India – Singapore tax

treaty will be applicable to the petitioner and the imposition of MAT will violate the tax

treaty.

ISSUE 6: WHETHER THE PETITIONER CAN CHERRY PICK THE PROVISIONS OF INCOME TAX

ACT AND TAX TREATY FOR THE PURPOSE OF DEFINITION OF PE UNDER THE ACT AND

CAPITAL GAINS EXEMPTION UNDER THE TAX TREATY.

It is humbly contended before the Hon’ble Court, cherry picking is permitted u/s 90(2) of the

Act [6.1] keeping Article 51(1) of the Constitution of India 1949[6.2].

[6.1] PROVISION UNDER SECTION 90(2) OF THE ACT

Section 90(2) permits a non-assesse to be governed by the beneficial provisions of the Act or

the applicable treaty55.Where the Government has entered into an agreement with the

Government of any country outside India or specified territory outside India, as the case may

be, under subsection (1) for granting relief of tax, or as the case may be, avoidance of double

taxation, then, in relation to the assesse to whom such agreement applies, the provisions of

52 LG Asian Plus Ltd v. Asst. Director of Income Tax 46 SOT 159 ITAT, Delhi Bench.

53Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015.p.63, para 5.8.4.

54United Nations Convention on Contracts for the International Sale of Goods, Article 26, “Vienna Convention” 11th April 1980.

55C.E.S.C. Ltd. v. Deputy Commissioner of Income Tax [2003]87ITD653(Cal), (2003)80TTJ(Kol)806



this Act shall apply to the extent they are more beneficial to that assesse56. Section 90(2) r/w

Chapter XA of the Act, states that DTAA clearly overrides Section 115 JB of the Act. Hence,

levying of MAT on the capital gains despite exemption under the DTAA, denies treaty

benefits and amounts to violation of DTAA provisions.57

[6.2] ARTICLE 51(1) OF THE CONSTITUTION OF INDIA 1949

Under S. 90(2), DTAA provisions override the Act including Section 115 JB if contain more

beneficial provisions for assesse company. The intent of Section 115 JB cannot be interpreted

to override treaty obligations.58 Cognizance must be paid to Article 51(1) of the Indian

Constitution which lays that the

“State shall endeavor to foster respect for international law and treaty obligations in the

dealings of organized people with one another.”59

In the light of Constitutional provision, the non-residential assesse is entitled to cherry pick

the beneficial provision. Hence, it is humbly submitted before the Hon’ble Court that the

petitioner is entitled to cherry pick the beneficial provision as has been made imperative

through the aforementioned statutory and constitutional provision.

ISSUE 7: WHETHER 115JB IS EQUALLY APPLICABLE TO FIIS/FPIS AND FDI AND THE SCOPE

AND NATURE OF FUNCTIONING OF FIIS/FPIS AND FDIS TO UNDERSTAND THE INVESTMENT

INTO INDIA.

It is humbly contended before the Hon’ble Court that Section 115JB will not be applicable to

FIIs/FPIs and FDIs. [7.1]

56In Re: Advance Ruling P .No .13 of 1995 (1997)141 CTR 542 (AAR).

57Assistant Commissioner of Income Tax v. Pride Foramer SAS (2008)116 TTJ (Delhi)369

58Bank of Tokyo-Mitsubishi UFJ Ltd v. ADIT ITA Nos. 5364/Del/2010

59Sheraton International Inc. v. Deputy Director of Income Tax [2006]10 SOT 542 (Delhi).



[7.1] APPLICABILITY OF SECTION 115JB TO FIIS/FPIS AND FDIS

The AP Shah committee report60 along with the Supreme Court61 hold 115JB inapplicable to

FIIs/FPIs with no place of business in India. CBDT circular62 states the Government’s

acceptance of the recommendations made by the AP Shah Committee report. Furthermore,

the legislature never intended to impose MAT to FIIs.63 As stated in circular64that a foreign

company with no PE in India, is associated with a country having DTAA with India, then

MAT will not be applicable. Hence, a foreign company investing through FDI shall not fall

u/s 115JB.

[7.2] SCOPE AND NATURE OF FUNCTIONING OF FIIS/FPIS AND FDIS

FDI pertains to large investments through which the investor obtains lasting interest in the

enterprise of another country.65 In India funds through FDI are generated through automatic

route or government route. The reinvestment of earnings and transfer of assets between a

parent company and its subsidiary often constitutes a significant part of FDI calculations. FDI

is difficult to dispose as it involves huge investments. FPI can be defined as66

“A person satisfying the eligibility criteria under Regulation 4 and registered

under Chapter II of the Regulations deemed as an intermediary.”

Thus, it is humbly submitted before the Hon’ble Court that Section 115JB will not apply to

FIIs/FPIs but instead to FDIs.

60Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015.

61Castleton Investment ltd. v Director of Income Tax (2015) 280 CTR 409 (SC).

62 CBDT circular, 2nd September, 2015

63Justice AP Shah, Report: Applicability of Minimum Alternate Tax (MAT) on FIIs / FPIs for the period prior to 01.04.2015.

64 CBDT press release, 24th September, 2015.

65 Foreign Exchange Management Act (FEMA), 1999.

66 Regulation 2(h) of the SEBI (FPI) Provision,2014.



PRAYER

WHEREFORE, in the light of the issues raised, arguments advanced and authorities cited,

the Petitioner humbly submits that this Hon’ble Court be pleased to:

1. Set aside the impugned order by the Authority for Advance Ruling; and

2. Hold MAT inapplicable and provide Capital Gains exemption as per the Double

Tax Avoidance Agreement

AND/OR

Pass any other order that it deems fit in the interest of Justice, Equity and Good Conscience.

All of which is most humbly and respectfully submitted.

Place: Bengaluru, Karnataka

Date: __ February, 2016

S/d ____________

(COUNSELS ON BEHALF OF THE PETITIONER)

Date post:	24-Mar-2018
Category:	Documents
Upload:	hanhu
View:	216 times
Download:	2 times

14TH SURANA & SURA NA NATIONAL CORPORATE ... SURANA & SURA NA NATIONAL CORPORATE LAW MOOT COURT...

Documents