The Resource Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07

Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07

Label
Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07
Title
Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07
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Subject
Language
eng
Summary
Judgment by the Income Tax Appellate Tribunal, Mumbai L Bench dated 10 November 2010. The taxpayer was a Belgian company which had a permanent establishment in India. The Belgian company had been formed for the sole purpose of conducting a project in India and its shareholders were another Belgian company as to 60% and a UK company as to 40%. The project in India was thus effectively a joint venture between those two companies. The taxpayer had a total paid up share capital of just over US$80,000. The two shareholding companies then made substantial loans to the Indian permanent establishment in the same 60:40 ratio, so that the debt equity ratio was an unusually high 248:1. The assessing officer disallowed a deduction for the interest paid on the loans on the ground that it was effectively a loan from the head office and hence payments 'from self to self'. The taxpayer appealed and the Revenue also argued on appeal that although India had at the time no thin capitalization rules the arrangement was a colourable device which could not be part of tax planning according to Indian cases interpreting the Income Tax Act 1961. The ITAT ruled in favour of the taxpayer
Citation source
In: International tax law reports. - London. - Vol. 13 (2011),
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • tax treaty
  • GAAR
  • thin capitalization
  • income tax law
Label
Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07
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Publication
Label
Besix Kier Dabhol, SA v Deputy Director of Income Tax (International Taxation) : ITA No 4249/Mum/07
Publication

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