Jurisprudentiol – Wednesday's cases

By Vijay Kumar

COFEPOSA

Legal Corner Icon — the image was hosted by the publisher and was not captured.Grounds of detention and relevant relied upon documents not provided to detenu violates Article 22 (5) of Constitution and Section 3(3) of COFEPOSA – Detention order quashed with directive to release detenu forthwith: Supreme Court

Constitution of India provides adequate safeguards under clauses (5) and (6) of Article 22 to the detenu who is detained in pursuance of the order made under any law providing for preventive detention.

Income Tax

India-USA DTAA - Applicant enters into agreement with Indian Co for cost allocation of services availed - withholding tax - TDS not applicable as services are rendered from outside India; even if some services availed are technical in nature, since no technical knowhow is 'made available' as per Article 12.4 of DTAA , no income is taxable in India - No TDS: Advance Ruling

IN the latest decision the Authority for Advance Ruling has held that the provisions of withholding tax u/s 195 will not be applicable if the services are provided by the applicant from outside India to its India-based Group Company. The Authority further notes that although most of the services listed out in the Cost Allocation Agreement signed by the applicant and the Indian Group Co are beyond the ambit of technical or consultancy services as they are managerial in nature, not covered under Article 12 of the DTAA or Sec 9(1) of the I-T Act, but even if some of them are technical in nature, what takes them outside the ambit of Indian I-T Act is the non-satisfaction of the requirement of technical knowledge or experience being 'made available' to the service recipient as per the Clause (b) of Article 12.4 of the DTAA .

Exim

Revalidation of licences after endorsement of transfer on duty free advance licences – Para 125 of Policy does not differentiate between transferable licence and a non-transferable licence – All import licences whether endorsed as transferable or non-transferable to be treated alike: Delhi HC

THE petitioner, M/s Ajay Industrial Corporation, exported hand pumps to UNICEF and based on these exports duty free advance licenses along with DEEC was issued. The petitioner requested the DGFT for transfer of four licenses which was allowed after due examination of the requests. Subsequently, the petitioner applied for revalidation of the licenses for an extended period. This revalidation request was rejected by the DGFT on the ground that there is no provision in EXIM Policy 1992-97 for revalidation of advance licenses which were already transferred.

See our columns Tomorrow for the judgements