The question raised before the AAR was, \u201cWhether\u00a0 the applicant is justified in its contention that amount due \/ received from Ranbaxy Laboratories Limited (\u2018Ranbaxy India\u2018) is in the nature of \u2018business profits\u2019\u00a0 and is not chargeable to tax in India under the provisions of the Act in the absence of business connection India under the provisions of the Act\u00a0 in the absence of business connection in India as per section\u00a0\u00a0\u00a0 9 (1)(i)\u00a0 of the Act or under the provisions of article 7 read with article 5 of the India-Israel Double Taxation Avoidance agreement\u00a0 (\u2018DTAA\u2019)\u00a0 in the absence of permanent establishment in India\u00a0 ? \u201c<\/p>\n
\u201cWhether the applicant is justified in its contention that amount due\/ received from Ranbaxy India is not taxable as \u2018royalty\u2019 or \u2018fees for technical services \u2018\u00a0 both under the Act or under the relevant provisions of India-Israel DTAA read with Protocol thereto ? \u201c<\/p>\n
The application was admitted on 6-7-2015,<\/p>\n
The AAR held that the applicant is not found to be real owner of the transactions and income did not accrue in its hand but it was only a case of application of income of BP USA to the applicant. Further, the basic condition of the transaction of the non-resident arising out of\u00a0 the transaction with a resident as stipulated under section 245N(a)(ii) was not fulfilled as the transactions of the applicant\u00a0 were not on account but towards application of income of BP USA. The transactions were also hit by the mischief of clause (iii) of the section 245R(2) of the Act, as they were designed\u00a0 prima facie for avoidance of tax. Accordingly the application is rejected. (AY.2016-17) (AAR No. 1476 of 2013 dt. 25-10-2019)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 245R : Advance rulings-Applicant is not found to be real owner of the transactions-Transactions were designed prima facie for avoidance of tax.-Application is rejected-DTAA-India-Israel. [S. 9(1)(i), 9(1)(vi), 9(1)(vii), 245N(a)(ii), 245R(2)]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-21106","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-5uq","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=21106"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21106\/revisions"}],"predecessor-version":[{"id":21107,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21106\/revisions\/21107"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=21106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=21106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=21106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}