| Case ID |
0f6984dc-714a-4352-8a41-7e4020652c14 |
| Body |
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| Case Number |
IT REFERENCE No. 102 OF 1971 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal ruled in favor of the assessee, determining that the income derived from interest on money lent to managed companies in East Pakistan was subject to 100% taxation by Pakistan under clause 5(f) of the Indo-Pakistan Agreement for Avoidance of Double Taxation. The Tribunal concluded that the funds were indeed brought into Pakistan and utilized for business purposes there, thus affirming the AAC's previous findings. The revenue's argument, which suggested that the income should be taxed in India under clause 9 of the agreement, was rejected as it was deemed a residuary clause. The case highlighted the importance of the intent behind the transactions and the application of the borrowed funds, ultimately confirming the assessee's rights under the relevant agreement. |
| Summary |
This case revolves around the application of double taxation relief provisions under the Indo-Pakistan Agreement for Avoidance of Double Taxation. The central issue was whether the interest income accrued to the assessee-firm in Pakistan, given that the money was lent to managed companies situated there. The Tribunal upheld the AAC's decision that the income was indeed derived from interest on loans brought into Pakistan, thus entitling the assessee to relief under clause 5(f) of the Agreement. The case underscores the complexities of international taxation and the significance of income sourcing in cross-border transactions. The ruling not only clarifies the application of the agreement but also sets a precedent for future cases involving similar issues of income derivation and taxation rights between India and Pakistan. |
| Court |
Calcutta High Court
|
| Entities Involved |
Soorajmull Nagarmull
|
| Judges |
Sabyasachi Mukharji,
Sudhindra Mohan Guha
|
| Lawyers |
Balai Pal,
Ajit Sengupta,
S.K. Bagaria
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Soorajmull Nagarmull
|
| Citations |
1981 SLD 1713,
(1981) 130 ITR 917
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
90,
49A
|