residential status
This query is : Resolved
07 July 2009
Thanks for the reply sir.
But would it not be considered as "control and management from outside India" under Income Tax Act?
But would it not be considered as "control and management from outside India" under Income Tax Act?
07 July 2009
Viswanath,
The status of the company is not depend on Board meeting. It is always on the basis of incorporation.
So in above case it will always be considered as resident indian company.
The status of the company is not depend on Board meeting. It is always on the basis of incorporation.
So in above case it will always be considered as resident indian company.
07 July 2009
As per sec 6(3)Any Indian company is always resident in India.
further as per section 2(26) "Indian Company" means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes—
(i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause (iii) of this clause[(ia) a corporation established by or under a Central, State or Provincial Act;
(ib) any institution, association or body which is declared by the Board to be a company under clause (17);]
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State;
(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa,119 Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory:]
Provided that the [registered or, as the case may be, principal office of the company, corporation, institution, association or body] in all cases is in India;
further as per section 2(26) "Indian Company" means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes—
(i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause (iii) of this clause[(ia) a corporation established by or under a Central, State or Provincial Act;
(ib) any institution, association or body which is declared by the Board to be a company under clause (17);]
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State;
(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa,119 Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory:]
Provided that the [registered or, as the case may be, principal office of the company, corporation, institution, association or body] in all cases is in India;
07 July 2009
agree with the expert
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08 July 2009
Thanks for the reply sir.
But would it not be considered as "control and management from outside India" under Income Tax Act?
But would it not be considered as "control and management from outside India" under Income Tax Act?
08 July 2009
Thanks for the reply sir.
But would it not be considered as "control and management from outside India" under Income Tax Act?
But would it not be considered as "control and management from outside India" under Income Tax Act?
09 July 2009
The control and management is relevant if company is foreigh compaCompany as per Sec. 6(3) An Indian company is always a resident in India.
A non-Indian company is said to be a resident in India, if the control & management of its affairs is situated wholly in India during the relevant previous year. If the control & management of a foreign company is situated wholly or partly outside India, the said company is non-resident in India for the relevant previous year.
here Control & management means -
• controlling & directive power;
• actual control & management (mere right to control & manage does not amount to control & management);
• central control & management and not the carrying out of day to day affairs.
The place of central control & management is situated where the head, the seat & the directing power is situated. Right to control is, generally, deemed to be situated, where the meetings of Board of Directors are normally held.
Stress: In case of company, there is no sub-division like ‘Ordinarily resident’ or ‘Not ordinarily resident’.
ny
A non-Indian company is said to be a resident in India, if the control & management of its affairs is situated wholly in India during the relevant previous year. If the control & management of a foreign company is situated wholly or partly outside India, the said company is non-resident in India for the relevant previous year.
here Control & management means -
• controlling & directive power;
• actual control & management (mere right to control & manage does not amount to control & management);
• central control & management and not the carrying out of day to day affairs.
The place of central control & management is situated where the head, the seat & the directing power is situated. Right to control is, generally, deemed to be situated, where the meetings of Board of Directors are normally held.
Stress: In case of company, there is no sub-division like ‘Ordinarily resident’ or ‘Not ordinarily resident’.
ny
16 July 2009
The status of a company would be of resident in India if it is incorporated in India. The concept of all directors being abroad is helpful in determining the residential status of a company being a company incorporated else where in world except in India. This means if a company is incorporated in say in USA, all it's directors are in USA, but this company operates in India through any branch or sub, then in addition to the ground that the company is not incorporated in India and thus is not a tax resident of India, the directors being outside India support this contention. By board situated outside India of a company incorporated in India, it can not be argued that the company is non resident in India. You may refer to case of Radha Rani Holding Pte. Limited by Delhi ITAT on the subject.
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