Direct Tax Laws & International Taxation - November 2022

MPK Pharma Ltd, a company resident in India, in which the public are not substantially interested, is engaged in the manufacture of pharmaceutical products. The Statement of Profit & Loss for the year ended 31s March, 2022 shows a net profit of € 50,75,000 after debiting or crediting the following items: (i) | One-time license fee of 12 lakhs paid to a foreign company for obtaining a franchise on 28" July, 2021. (ii) Convertible debentures were issued by the company…

M/s PRK LLP a limited liability partnership, set up a unit in Special Economic Zone (SEZ) on 1s‘ April, 2019 to develop and export computer software. The unit complied with all the conditions of section 10AA. The net profit of the unit as per Statement of Profit & Loss for the year ended 31s! March, 2022 was ¢ 66 lakhs after debiting/crediting the following items: (i) Profit on sale of import entitlement ¢ 9 lakhs. (ii) Remuneration to its working…

The Head of Accounts of Fit Me Foundation, a trust, established for the purpose of promotion of Yoga has approached you to guide him about the tax implications of the following: (i) During the financial year 2021-22, it received a voluntary contribution of ₹125 lakhs with a specific direction that it should form part of the corpus of the trust. The trust invested such amount in the shares of M/s. Bend and Blend Private Ltd., a private sector company. (ii)…

(a) In respect of the following independent case scenarios, you are required to discuss the provisions related to tax deducted at source for the year ended 31%' March, 2022: (i) Tam Electronics Ltd., an Indian company, imports certain computer software from Jam Electronics Inc., a non-resident company based in USA for reselling it to the end users in India. During the F.Y. 2021-22, Tam Electronics Ltd. paid a sum of ₹85 crores to Jam Electronics Inc. (ii) DEHP Ltd., a…

(a) Answer any two out of the following three sub-parts, viz. (i), (ii) and (iii). Your answer should cover (a) Issue involved (b) Provision applicable (c) Analysis (d) Conclusion (i) During the scrutiny assessment of Refresh Me Ltd., a company engaged in manufacture and distribution of packaged juices, the Assessing Officer (AO) increased the income and thus, passed an order of demand. Aggrieved by the order, the assessee filed an appeal to CIT(A), who confirmed the order of A.O. Assessee…

(a) In the following independent circumstances, discuss whether the provisions of GAAR would be applicable: (i) Milo Ltd., an Indian company, is making losses for the past several years. Tilo Ltd., another Indian company, having huge profits acquired Ms. Milo Ltd. (ii) DAMP Inc., a company incorporated in Country A, holds 1000 equity shares in MAP Ltd., an Indian listed entity since 1.4.2016. On 1.5.2021, MAP Ltd. issued 1000 bonus shares to DAMP Inc. As per the treaty between India…