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Meaning- A double Taxation is levy of tax by two or more jurisdiction on the same income. To avoid double taxation countries enter into DTAA, DTAT. To encourage flow of foreign capital. To mitigate the hardship caused by dual taxation on the same income. Indo-Mauritius DTAA
Article 13- Capital Gain Article 4- Definition of Resident Section 90, 90A, Income Tax Act, 1961
A person cannot be guided by a law which did not exist at the time when the action occurred. It is fundamentally unfair to hold a person to be in contravention of the law when that law did not exist when the alleged contravention occurred.
Rewriting the law, to nullify the decision of court, involves two causalities;
Respect for Judiciary Certainty of Law
Ishikawajima Harima Heavy Industries Ltd. v. Director of Income Tax, Mumbai (2007) 3 SCC 481 Finance Act 2007 (with effect from June 1, 1976)
Section 2 (14) Definition of capital asset Explanation.For the removal of doubts, it is hereby clarified that property includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever;
Explanation 5.For the removal of doubts, it is hereby clarified that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India. Section 149 (1) Time limit for notice:
(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.
Reopening of cases. Non resident who have liquidated their investment will under scrutiny Conflict with DTAA and IT Act. (with respect to amendment in Section 90)