Prajna Capital - An Investment Guide

Sometimes certain assessees particularly the Non-Residents transfer certain capital assets outside India. However, the capital asset may be situated in India. In such cases the controversy arises as to whether capital gains tax would be attracted in such cases particularly where the actual process of transfer is outside India. Fortunately, the Authority for Advance Rulings in Foster`s Australia Ltd.., In re (2008) 302 ITR 289 (AAR) has given an important ruling that capital gains tax would be attracted in the case of a Non-Resident if the capital asset is situate in India even if the actual process of transfer happens to be outside India. As this is an important ruling particularly on the provisions of Section 9(1)(i) of the Income Tax Act, the facts of the case and the ruling are analysed in the article below. FACTS: The applicant was a non-resident foreign company incorporated in Australia involved in the brewing, processing, packaging, marketing, promoting and selling of beer...