Taxation of shares of Indian companies allotted to non-residents in consideration for the purchase of machinery and plant delivered abroad

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....inserted in sub-section (1) of section 9 of the Income-tax Act, 1961, by the Finance Act, 1976, with effect from June 1, 1976. As a result, income by way of royalties and fees for technical services is deemed to accrue or arise in India in the cases specified under these provisions. There are, however, two exceptions to the above general position. Firstly, lump sum consideration paid under approv....

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....on for the transfer abroad of technical know-how or services, or delivery abroad of machinery and plant, and the payment is not taxable under section 5(2)(b) of the Income-tax Act as income accruing or arising or deemed to accrue or arise in India, no attempt should be made by the Department to bring to tax the profits or gains on such transactions merly on the ground that the situs of the shares ....

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.... concessions in paragraph 11 of the said circular are in the nature of extra legal concessions and the Board have decided to withdraw the same. Paragraph 11 of the Public Circulr No. 21 may, therefore, be treated as withdrawn with immediate effect. (Sd.) Bhuvanendra Nigam, Director, Central Board of Direct Taxes. * [1969] 73 ITR (St.) 19. + Ibid., p. 22 ** Paragraph 11 of Circular No. 21 of 1....