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India: Dividend distribution tax; foreign tax credit verification

India: Dividend distribution tax

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • No “transfer” of capital assets without joint development agreement:  The Supreme Court held that the provisions of a “transfer” under section 2(47)(v) of the Income-tax Act, 1961 were not applicable because the joint development agreement entered into by the taxpayer with the developers was not registered. To qualify as a “transfer” of a capital asset under section 2(47)(v) of the Income-tax Act, 1961, there must be a “contract” that can be enforced in law under section 53A of the Transfer of Property Act, 1882. The case is: Balbir Singh Maini. Read an October 2017 report [PDF 599 KB]
  • Guidelines for reopening of assessment proceedings: The Delhi High Court released guidelines for the tax department for reopening of re-assessment proceedings. The High Court observed that on a routine basis, a large number of writ petitions were filed challenging the reopening of assessments by the tax department under sections 147 and 148 of the Income-tax Act, 1961, and despite numerous decisions on this issue, the same errors have been repeated by the tax department. The case is: Sabh Infrastructure Ltd. Read an October 2017 report [PDF 430 KB] 
  • Subsidiaries of holding companies: A provision of the Companies Act, 2013 is now effective for prescribing that certain class/classes of holding companies may not have layers of subsidiaries beyond a prescribed number. Read an October 2017 report [PDF 441 KB]
  • Self-assessment tax: The Ahmedabad Special Bench of the Income-tax Appellate Tribunal held that penalty under a provision of the Income-tax Act, 1961 will apply with respect to the payment of self-assessment tax due on filing of the original income tax return, even though the taxpayer subsequently filed a revised return of income and paid the tax. The case is: Claris Life Sciences Ltd. Read an October 2017 report [PDF429 KB]
  • Dividend distribution tax: The Supreme Court of India on addressing the constitutional validity of imposition of the dividend distribution tax on composite income, held that the provisions of the Income-tax Act, 1961 apply on the entire dividend income of the company. The case is: Tata Tea Co. Ltd. Read an October 2017 report [PDF 585 KB]
  • Foreign tax credit: The Central Board of Direct Taxes prescribed a procedure for filing a statement of income from a country or specified territory outside India for purposes of the foreign tax credit. Read a September 2017 report [PDF 310 KB]
  • Contract receipts as income: The Jammu and Kashmir High Court held that contract receipts were not to be treated as income of a joint venture company in a case of diversion of income by overriding title. The case is: Soma TRG Joint Venture. Read a September 2017 report [PDF 435 KB]

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