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.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
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.
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