Jurisprudentiol- Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Non-resident airlines - Indo-US tax treaty - No exemption for activities like third party security screening and charter handling as such subsidiary activities do not fall within ambit of words 'any other activity directly connected with such transportation' under Article 8 of tax treaty: ITAT

AIRLINES business is a highly competitive sector. To shore up bottom-line, undertaking subsidiary activities like security screening services, maintenance services and third party charter handling services is a common practice. And this is what the assessee, a tax resident of the USA, did in India. However when it came to its taxability, it claimed exemption under Article 8 of the Indo-US tax treaty.

Service Tax

No review by Commissioner after order passed by Commissioner (Appeals) - doctrine of merger is not a doctrine of universal or unlimited application, and it will depend on the nature of jurisdiction exercised by the superior forum- High Court

THIS was the question framed for the High Court's verdict. "Whether the Commissioner of Central Excise could exercise his power of revision under Section 84 of the Finance Act, 1994 to the extent the order of Adjudicating Authority was found to be erroneous by him and about which no appeal lay at the instance of Revenue notwithstanding that to the extent the assessee was aggrieved, he had preferred the appeal and the order in appeal has been passed."

Income Tax

Rent - India-UK tax treaty - legal services hired by Indian clients - territorial nexus doctrine - only that part of income is chargeable to tax in India which arises from services rendered and also utilised in India; Income from services utilised in India but rendered outside India not taxable: Bombay HC

WITH India and UK taking crucial steps forward to allow their legal professionals to freely set up shops in each other's domain and provide legal services to business and industry what was perhaps required as the last input for cementing this relationship was the taxability of their income. If that was so, here is an important decision from the Bombay High Court which has held that if the full effect is given to the provisions of Sec 9(1)( vii)(c), the income of tax-resident of UK which provided legal services to Indian client on hourly basis and their services were utilised in India is chargeable to tax only to the extent the income is attributable to India within the framework of territorial nexus doctrine.

See our columns tomorrow for the judgements