Section 174 - Avoidance of income-tax by transactions resulting in transfer of income to non-residents.

Avoidance of income-tax by transfer to non-residents: transfers creating power to enjoy foreign income are deemed taxable to the resident.

Where asset transfers, alone or with associated operations, cause income to be payable to a non-resident, that income is deemed to be the income of the person who, by virtue of the transfer, acquires rights giving him the power to enjoy the non-resident's income and would have been taxable if it were his. The deeming also applies where a capital sum connected to the transfer is paid to that person. The deeming is subject to an exception if the Assessing Officer is satisfied the transfers were not for tax-avoidance and were bona fide commercial transactions.