Finance
try to avoid withholding provisions is a tax avoidance arrangement. Also A foreign company can interpose another company for investing in India to take advantage of treaty benefit by direct transfer of shares by the foreign company would have attracted capital gains in India. The case is similar to the Bombay High Court decision in the case of Aditya Birla Nuvo Ltd.
Anoop Sharma C N IMT - Nagpur 2012-14 Batch GAAR: Boon or bane for developing economies?
Abstract: GAAR is being both considered as a boon and a bane in a different context. To consider it as a boon it a very progressive move in so far as tax policy as concerned which will address major flaws like Disguising business transactions conducted in a taxable jurisdiction as being undertaken in a low tax jurisdiction so as to avoid taxation then by be routing of investments by a resident of one country through the other country ‘X’ back to one’s own country. To consider it as a bane as the law is making a big blunder by mistaking change for progress and mindlessly churning out ill-thought out amendments to the Income-tax Act year after year with an unstable policy creating problem to different segment of people. GAAR abbreviation stands for general-anti-avoidance rules. In the environment of moderate tax rates, according to the government it is necessary that the correct tax base be subject to tax in the face of aggressive tax planning and use of opaque low tax jurisdictions for residence as well as for sourcing capital. It is important to highlight the distinction between Tax Evasion and Tax Avoidance. Need for general anti-avoidance rule (GAAR): GAAR or General Anti-Avoidance Rule is aimed at preventing deals or income that is structured only to avoid paying taxes. Tax avoidance, like tax evasion, seriously undermines the achievements of the public finance objective of collecting revenues in an efficient, equitable and effective manner. Sectors that provide a greater Opportunity for tax avoidance tends to cause distortions in the allocation of resources. Since the better-off sections are more endowed to resort to such practices, tax avoidance also leads to cross-subsidization of the rich. Also there might be an arrangement involving finalizing loan from one country and assigning it to another coun-
Also An Indian Company can voluntarily get liquidated and its assets are transferred to its holding companies in a jurisdiction that levies lower tax on capital gains. Also there might be an arrangement involving borrowing of money for investment in a connected party at a significantly higher premium, such capital which was then moved back to another connected party of the lender, and then the investment was sold off at a loss to claim set off of losses, is lacking commercial su ??????????????M?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????%??????????????????ac?d?????????????????????????????????????????????%??????`???????????????????????????????????????????????????????!???????????????????????????
??????`???????????????????????????????????????????????????????????????????????????????????????
?????ac?d????????????????????????????????????????????????????????????????????????????ac?d????????????e????????????%??????????????????????????????????????%???????????????????????????????????????????Q???????????????aI????Q???????d????aQ?????M????????d??????????????????????%????????%???????? H??5????????????????????????????5??????????????????Q????????????????????Q??????????????????????????????????????????????????????????Q?????????????????????????????????????????????????????5???????????????????????????????????????????????????????????Q????????????????????????Q?????????????????????????????????????????????????????????????????????????????????(?()?94???5??????Y?????((0