Miles Inc., a company incorporated in US, is engaged in development of infrastructure and providing consultancy in the same field. During the Financial Year 2023-24, its shareholders met in India for three times. The fir

Answer 6A(i) Miles Inc. is a company incorporated in US. It would be resident in India, if its Place of Effective Management (POEM) is in India in that year. As per the POEM guidelines, the decisions made by a shareholder for sale of all or substantially all of the company's assets, or the modification of the rights attaching to various classes of shares or the issue of a new class of shares etc. are decisions typically affecting the existence of the company itself or the rights of the shareholders as such, rather than the conduct of the company's business from a management or commercial perspective. Therefore, such decisions are not relevant for determination of a company's place of effective management. Therefore, the POEM of Miles Inc. is not in India and hence, it is a non-resident for A.Y.2024-25. Taxability of Income As per section 5(2), in case of a non-resident, only income which accrues or arises or which is deemed to accrue or arise to it in India or which is received or deemed to be received in India in the relevant previous year is taxable in India. Computation of Total Income of Miles Inc. for A.Y. 2024-25 Particulars Amount in Rs. Fees for technical services received from Government of India [As per section 9(1)(vii) any Fees for Technical Services (FTS) would be deemed to accrue or arise in India if they are payable by Government of India. Since FTS is received from Government of India, it is deemed to have accrued or arisen in India irrespective of that fact that it is utilized for a project outside India) 5,55,000 Interest received from M/s Lalit Enterprises, a unit located in IFSC for monies borrowed by it on 20th November 2023 [As per section 10(15)(ix), interest payable to Miles Inc., a non-resident, by M/s Lalit Enterprises, a unit located in an IFSC, in respect of monies borrowed by it on or after 01.09.2019 is exempt from income-tax] Nil Long term capital gains Sale consideration (5500 * ₹ 90) = ₹ 4,95,000 Less: Cost of acquisition, being higher (a) or (b) i.e. ₹ 3,85,000 (a) Actual cost i.e., (5500 * ₹ 65) ₹ 3,57,500 (b) lower of ₹ 3,85,000 ₹ 3,85,000 (5,500*₹ 70), being fair market value on 31.1.2018 and ₹ 4,95,000 (5,500*₹ 90) being full value of consideration Long-term capital gains, is taxable @10% u/s 112A in excees of ₹ 1,00,000] 1,10,000 Total Income 6,65,000