Miles Inc., a company incorporated in US, is engaged in development of infrastructure and providing consultancy in the same field. During the…

Miles Inc., a foreign company, would be resident in India in P.Y. 2023-24 if its POEM, in that year, is in India. Since the meeting of Board of Directors are held outside India i.e., in Chicago, USA where management and commercial decisions necessary for conduct of company's business are taken, its POEM during the A.Y. 2024-25 would be outside India. Hence, Miles Inc. is a non-resident during the P.Y. 2023-24. The decisions made by shareholders in India on modification of the rights attaching to various classes of shares and sale of company's assets situated in India are not relevant for determination of Miles Inc.'s place of effective management. Computation of total income of Miles Inc. for the A.Y. 2024-25 Particulars Amount (₹) Dividend received on GDR of an Indian company [Taxable, since income is from any asset or source of income is in India. Tax @10.4% would have been deducted on dividend of GDR] [₹ 5,50,000 / 89.6%] 6,13,839 Fees for technical services received from Government of India [Taxable, since it is deemed to accrue or arise in India on account of being received from Government of India even though services are utilised for development project carried out outside India. Tax @20.8% would have been deducted on FTS received from Government] [5,55,000/79.2%] 7,00,758 Note – Since, the word "received” is mentioned after fees for technical services, the solution has been worked out considering the FTS amount as net of TDS and accordingly grossing up has been done. However, on account of using the word "Net of TDS” after dividend amount but not after FTS amount, it is possible to assume the FTS amount of 5,55,000 as gross amount. In such a case, total income would be - 11,68,839. Total Income 13,14,597