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Delhi High Court ruled on the issue of Association of Person (AOP)

Global Tax Update:August 2015/India

The Delhi High Court has recently held that where a Joint Venture (JV) was formed only to secure contract and where the scope of each JV partner's task was distinctly outlined, entire work was split between two JV partners and they completed task, through sub-contractors, JV was not an AOP and not liable to be taxed on that basis. (Global Tax Update:August 2015/India)

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1. Delhi High Court ruled on the issue of AOP

The High Court relied on the decision in the case of Linde AG wherein it was observed that unless the facts lead to a conclusion that there is sufficient joint participation for a common enterprise, it would not be appropriate to treat two or more persons as an AOP for the purposes of taxing them as separate taxable entity.

2. Bangalore Tribunal ruled that withholding at higher rate of 20% not applicable when DTAA benefits are available

The Bangalore Tribunal in the case of Infosys BPO has held that there is no scope of withholding tax at the rate of 20% as per section 206AA of the Income-tax Act, 1961 (the Act) when the benefit under Double Taxation Avoidance Agreement (DTAA) is available to the taxpayer.


>> Click for Japanese [AOP に関するデリー高等裁判所の判決 ほか]

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