Wednesday, 15 August 2012

AAR not bound by own rulings. Transfer pricing & ROI filing provisions apply despite no income. Foreign company is liable for MAT u/s 115JB

In Re Castleton Investment Ltd (AAR)

The applicant, a Mauritius company, sold shares of Burroughs Wellcome (India) Ltd. The resultant capital gains were not chargeable to tax under the India-Mauritius DTAA. The AAR had to consider whether, as the Applicant had no income chargeable to tax in India, (a) the transfer pricing provisions were applicable to its, (b) section 115JB (MAT) was applicable to it and (c) it was liable to file a return of income. The AAR had to also consider whether it was bound by its own earlier rulings. HELD by the AAR:

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