Thursday, March 8, 2012

Section 163 if Applicable dosen't mean Non-resident Liable to Tax

Section 163 does not require that in order to treat a person as agent of a non-resident, liability to tax of non-resident should be established.



• Under procedure for treating a person in India as agent of non-resident, it does not appear that liability of non-resident to tax has to be established; provisions of section 163 do not lay down any such condition; purpose of section 163 is to enable revenue to proceed against person in India who is regarded as agent of a non-resident, so that vicarious liability can be imposed on him, if it is found that income of non-resident is chargeable to tax in India; at stage of treating a person in India as agent of a non-resident, liability to tax of non-resident need not be established; if any of parameters laid down in section 163(1) (a) to (d) are satisfied, then person in India can be treated as Agent of non-resident
• With regard to contention that simultaneous proceedings for assessment of same income in hands of agent as well as principal should not be resorted, it is to be noted that proceedings under section 163 is only for purpose of enabling revenue to safeguard its interest in event of tax liability being ultimately found to exist in hands of non-resident; such proceedings cannot be said to be assessment proceedings against agent

[2012] 19 taxmann.com 37 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'L'
ADIT (International Taxation)
v.
Jet Airways (India) (P.) Ltd.
R.S.SYAL, ACCOUNTANT MEMBER
AND N.V.VASUDEVAN, JUDICIAL MEMBER
IT APPEAL NOS. 2212 TO 2214 AND 4771 & 4772 (MUM.) OF 2002
[ASSESSMENT YEAR 1998-99]
FEBRUARY 29, 2012

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