Article
Tax exemption to Sovereign Wealth Funds – Whether taxable at all?
By Samyak Lohade
After the recent introduction of exemption to Sovereign Wealth Funds in respect of certain income earned from India, the issue as to whether such entities are subject to tax, in the first place, has been reignited. A question also arises as to whether the exemption now granted is clarificatory in nature or implies that these entities and other similarly placed entities shall be liable to tax in India, but for the exemption. Citing various domestic and foreign case law and books, the author of the article in this issue of Direct Tax Amicus states that generally, foreign sovereigns are immune from the application of local/municipal laws of another country. The author believes that Section 10(23FE) just follows the already established doctrine of restrictive immunity for foreign sovereigns, and that the exemption can only be treated as being clarificatory in nature, since under the established principle of International Law, sovereigns can claim immunity from domestic laws of another country in respect of non-commercial activities. According to the author, a potential source of litigation could be the meaning of ‘commercial activity’, and whether ‘investment activity’ can be possibly covered within the such meaning...
Notifications and Circulars
- Mandatory provision of electronic payment – Section 269SU of Income Tax Act when not applicable
- Safe Harbour Rules for international transactions made applicable to AY 2020-21
- Remuneration to eligible fund manager under Section 9A – Manner of calculation notified
- New Form 26AS [Annual Information Statement] notified
Ratio decidendi
- Recognition of a receipt as ‘income’ is subject to fulfilment of obligation attached to such receipt – ITAT Mumbai
- Profits from technical handling services to IATP Pool Members and Non-members exempt under Article 8(2) of India-France DTAA – ITAT Delhi
- Transfer pricing provisions contained in Chapter X are applicable on grant of interest-free loans – ITAT Bengaluru
- Reopening of assessment merely based on Central Government report, without any evidence on record, is unjustified – ITAT Mumbai
- Jurisdictional grounds can be raised by an oral application under Rule 27 of ITAT Rules – Delhi High Court
- Revisional jurisdiction under Section 263 can be exercised in matters not subject-matters of appeal – Punjab and Haryana High Court
