Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai

Ruling of the AAR
• The AAR accepted the contentions of the assessee.
• It observed the profits arising from transfer of shares of an Indian
company are taxable in India under the Act.
• However, the assessee is entitled in law to seek the benefit under the
India-Mauritius DTAA which provides for taxation of such profits in
Mauritius only per Article 13(4) of the DTAA.
• The AAR relied on the judgment of Supreme Court in the case of Azadi
Bachao Andolan and the Circular no. 682 dated 30 th March 1994 and
Circular No.789 dated 13 April 2000 which provide for taxation of capital
gains, arising to a person resident in Mauritius , in Mauritius only and not
in India.
• AAR ruled that there is no liability of tax in India on capital gains arising
to the assessee.
August, 2011
CA Sanjeev Lalan, Singrodia Goyal & Co.
Presentation at JB Nagar CPE Study Circle
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