O.P.

Jindal Global University

Jindal Global Law School
Mid-Term Test, Spring 2024

Course Name : Law of Taxation

Programme : LL.B
Session : 2023-2024
Time Allowed : 36 hours
Maximum Marks : 30

This question paper has seven (7) printed pages (including this page).

Instructions to students:
1. This question paper has five (5) questions.

End Term Examination- Section C

2. You are required to answer any five (3) questions.
3. Brevity is a virtue. What is being judged is the substantive content and analytical ability of students, not
their endurance. The word limit per question shall not exceed 600 words.
4. Students undertaking the examination are requested to adhere to the University norms related to
examinations.
5. You cannot consult with any student while writing your answers. Your answer must be entirely
your own. You cannot share with any other student any answers until the exam is over.

_________________________________________________________________________________________
This is a Take Home examination.
Warning: Plagiarism in any form is prohibited. Anyone found using unfair means will be penalized
severely.
ATTEMPT ANY 3 OUT OF 5 QUESTIONS. WORD LIMIT FOR EACH QUESTION- 600 Words

Question 1 (10 marks)

Company A, a company incorporated in Singapore, has 2 (two) shareholders; the shareholding is provided as
follows:

Mr. David, resident of India – 99% shares

Ms. Alexis, resident of Singapore – 1% shares
Both the shareholders are also directors of Company A.
During FY 2020-21, the board meetings (as per the board resolution) were held in Singapore with Mr. David
attending the meeting through video conference. Company A’s CEO is also Mr. David who undertakes day-to-
day management decisions for Company A. Following income was earned by Company A:

i) Interest income: INR 10,00,00,000/-

ii) Dividend income: INR 5,00,00,000/-
iii) Rental income: INR 15,00,00,000/-
iv) Income from business: INR 30,00,00,000/-

End Term Examination- Section C

Please answer the following questions:

a) Whether Company A is resident of India under Income Tax Act, 1961? (5 marks)

b) If Company A earns business income of INR 40,00,00,000/-; would your answer to a) above change?
How? (5 marks)

Please justify your answers with relevant statutory provisions and case laws.

OR

Question 2 (10 marks)

Victoria Talkies is a single screen cinema hall in Sonipat and has been incurring several losses in the last
decade. The rise of multiplexes has adversely impacted the viability of the single screen cinema halls. It was
noticed that these multiplexes are highly capital intensive, and their gestation period is quite long and therefore,
they need Governmental support in the form of grants. To revive and to give the industry a boost, the State
Government of Haryana announced a grant-in-aid of Rs. 100 crores. Fortunately, Victoria talkies obtained the
grant in Financial Year 2014-15, as it was squarely fulfilling all the relevant criteria prescribed by the State
Government. The proceeds of the grant were mandatorily required to be utilized towards refurbishment and
substantial modernization of the cinema halls, their conversion into multiplexes and generation of employment.
Victoria Talkies did not present the said amount received as grant-in-aid for computing their taxable income, on
the ground that it amounted to a ‘Capital Receipt’. Discuss the Nature of this receipt by Victoria Talkies in
detail with the help of the relevant case laws.

Question 3 (10 marks)

In April, 2020 Dutch-based Telenet Communications International Holdings acquired Caymanian-based AMS
Investments Ltd. from Shinua Telecommunications International Ltd., a tax resident of Hong Kong for US $ 4.2
billion. AMS Investments Ltd. held various underlying subsidiaries in Mauritius which ultimately held a 69%
stake in Skylark Ltd., an Indian company and a dominant player in the Indian telecom industry. By virtue of this
transaction, Telenet Communications International Holdings acquired 69% controlling interest in Skylark Ltd.
a) Discuss the taxability of Shinua Telecommunications International Ltd.’s gain arising from sale of shares of
AMS Investments Ltd. and the consequent transfer of “controlling interest” of Skylark Ltd. within the taxable
territory of India with the help of pertinent case law. (5 marks)
b) Explain the implications of the recently passed Taxation Laws Amendment Act, 2021 on such transactions.
(5 marks)
OR

Question 4
End Term Examination- Section C(10 marks)
Explain the relationship/interplay between Business connection and Permanent establishment with the help of
relevant case laws.

Question 5 (10 marks)

a) During the PY 2015-16 Raman & Sons HUF was controlled by Karta Raman who is a citizen of India
but stays in Dubai. For the purposes of negotiating sale of HUF’s property located in India, Raman has
been visiting India to deal with the property dealers. Raman has been visiting India for 50 days every
year. Determine the residential status of the HUF for the assessment year 2016-17. (5 MARKS)

b) Alooka Chaalu was an India citizen upto March 31, 2010. With effect from April 1, 2010, she migrated
to Kenya and took the citizenship of that country. She was born in Delhi in 1980. Her parents were born
in Kolkata during 1950. However, grandparents of Alooka Chaalu were born in South Africa. From the
information given below, find out the residential status of Alooka Chaalu for the assessment year 2016-
2017.

Year Presence in India Year Presence in India

2016-2017 14 days 2010-2011 38 days
2016-2015 60 days 2009-2010 180 days
2015-2014 181 days 2008-2009 181days
2014-2013 180 days 2007-2008 175 days
2013-2012 58 days 2006-2007 181days
 2012-2011 60 days 2005-2006 44 days

Note - He left India for the first time in 1996 to set up a business outside India since then he comes to India
every year as shown in the table above. (5 MARKS)

End Term Examination- Section C