CASE LAW
2016-TII-22-HC-MAD-INTL
T RAJKUMAR Vs UOI: MADRAS HIGH COURT (Dated: April 12, 2016)
Income Tax - Writ - Sections 4, 5, 90, 94A(1), 156, 195, 201, 201(1A), 246A - India-Cyprus DTAA - Articles 27 & 28.
Keywords: tripartite agreement - constitutional validity - convertible shares & debentures - face value - payment of purchase consideration - cyprus company - Notification No 86/2013 - show cause - assessee in default - obligation for TDS & notified jurisdictional area.
Whether provisions of Section 94A inserted in the I-T Act can be said to be the need of the hour and, therefore, is not uncontitutional - YES: HC
Whether in case of sale of Indian shares and debentures by a Cyprus-based company to a person of Indian origin, the purchase consideration paid by such individual to the foreign company is subject to tax as per the provisions of the Income Tax Act - YES: HC
Whether in case of non-payment of tax dues on the sales consideration paid, the assessee would be considered as assessee in default, liable for initiation of proceedings u/s 201(1)/201(1A) - YES: HC
Assessee's appeal dismissed