2008 (8) TMI 388

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....reement dated 21-4-2002 with M/s. Atlas Copco India Ltd. and M/s. Chicago Pneumatic Tool Co., USA, it entered into an agreement for purchase of 9,60,000 shares of Revathi Equipment Ltd. for a consideration of Rs. 22,46,40,000 which was paid by the company after deduction of tax at source of Rs. 2,08,73,792 in accordance the certificate issued under section 197 (1) of the Income- tax Act, 1961 bearing No. Dy. DIT.1(1)197-UIL/2002-03/30, dated 6-9-2002. The amount was remitted to MI s. Chicago Pneumatic Tool Co., USA with the permission of RBI vide letter dated 31-7-2002 and 5-8-2002. The assessee had, thus, purchased certain shares from the foreign company, a non-resident and had remitted certain amount after deduction of tax at source on ob....

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....and the assessee purchased the shares and remitted the amount. He relied on the judgment of the Hon'ble Supreme Court in the case of Transmission Corpn. of A.P. Ltd. v. CIT [1999] 239 ITR 587 for the proposition that income is embedded in the transfer of funds on the sale of shares from the foreign company to the Indian company. 5. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on perusal of the papers on record we hold as follows: 5.1 Section 163(1)(c) of the Income-tax Act, 1961 reads as follows: "163. (1) For the purpose of this Act, "agent", in relation to a non-resident, includes any person in India- (a) & (b) ** (e) from or through whom the non-resident is in receipt of any inco....