CA NeWs Beta*: Advance Ruling — Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc

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Wednesday, February 26, 2014

Advance Ruling — Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc





Trade Circle Enterprises LLC, In Re


Advance Ruling — Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc — Maintainability of application — Applicant was a company registered in UAE and engaged in business of developing and investing in infrastructure and real estate sector — It intended to invest in a 100% subsidiary company in India, which intended to setup a consortium by way of partnership firm with another Indian Company namely, MEPPL — Consortium (partnership firm) proposed to acquire undertaking of MEP Infra Private Limited which was engaged in business of operating and maintaining road bridges in Mumbai — Consortium was eligible for tax deduction of 100% of its profits and gains from such undertaking for a period of 10 consecutive assessment years out of 20 assessment years as per provisions of s 80IA(4)(i) — Advance Ruling was sought on question whether transfer of Undertaking from MEPPL to partnership firm in which Applicant was considering to join as a partner through its Indian subsidiary, would in any manner, affect allowability of deduction u/s 80IA(4)(i) to partnership firm — Held, In order to bring in question within scope of s 245N, there has to be either a transaction undertaken or proposed transaction to be undertaken by the non-resident applicant — "Transaction" or "proposed transaction" are not same as mere intention — In instant case question relates to proposed setting up of subsidiary and partnership firm with the Indian company by applicant and as to whether subsidiary or partnership firm will be eligible to 100% deduction u/s 80IA — 100% subsidiary company has to exist in reality and partnership firm has to be set up in order to make transaction or proposed transaction of applicant with Indian company/subsidiary — Questions posed do not fall under purview of Authority — Application dismissed.



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