N.No. 64/2013-Sec.10(48)

On 19th of August 2013 CBDT issued a circular stating that certain income of a specified assessee is exempt u/s 10(48) of Income Tax Act, 1961. So to understand this notification first we should have knowledge that “what is the Sec. 10(48)” and what it exactly speaks.

As we, all are aware that sec 10 of the income tax is specifically devoted for exemptions and furthermore clause 48 too is the part of the same pool.

Section 10(48) states that any income received by a foreign company from sale of crude oil in India is exempt provided that such company is not engaged in any other activity in India.

Under this notification, the receipt of Income of the National Iranian Oil Company is exempt u/s 10(48) from the sale of Crude Oil to India.  This Notification comes into effect from January 20^th  2013 i.e. retrospectively.

Text of Sec 10(48) of Income Tax Act, 1961

 In computing the total income of a previous year of any person, any income falling under this clause shall not be included-

Any income received in India in Indian currency by a foreign company because of [sale of crude oil to any person] in India:

Provided that—

(i)  Receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government;

(ii)  Having regard to the national interest, the foreign company and the agreement or arrangement are notified by the Central Government in this behalf; and

(iii)  The foreign company is not engaged in any activity, other than receipt of such income, in India;]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

[Notification No. 64/2013/ F.No.142/22/2013-TPL]

New Delhi, the 19th day of August 2013

INCOME TAX

S.O. 2493(E).– In exercise of the powers conferred by clause (48) of Section 10 read with Section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to the national interest, hereby notifies for the purposes of the said clause, the National Iranian Oil Company, as the foreign company and the Memorandum of Understanding entered between the Government of India in the Ministry of Petroleum and Natural Gas and the Central Bank of Iran on the 20th day of January, 2013, as the agreement subject to the condition that the said foreign company shall not engage in any activity in India , other than the receipt of income under the agreement aforesaid.

2. This notification shall be deemed to have come into effect from the 20th day of January 2013.