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2013 (3) TMI 413 - DELHI HIGH COURTWrit petition filed against the advance ruling order [2011 (5) TMI 561 - AUTHORITY FOR ADVANCE RULINGS] - 74% shares of Goodyear India Limited were held by a USA company who has a 100% subsidiary in Singapore - whether the transfer of the 74% shares to the Singapore company, which was without any consideration, even if the same was for consideration would be exempted from income-tax in view of the specific provisions of section 10(38) read with Chapter VII of the Finance (No.2) Act, 2004 - Held that:- Charge of 'securities transaction tax' as given in section 98 of Chapter VII of Finance (No.2) Act, 2004 r.w.s. 10(38) states that income arising from the transfer of a long term capital asset, if it is an equity share in a company or a unit of an equity oriented fund, where the transaction of sale of such equity share is chargeable to securities transaction tax, then such income would be exempt. Thus if income arises out of the transfer of a long term capital asset being an equity share in a listed company, the said income would be exempt under section 10(38) of the said Act. There is no doubt that the shares of Goodyear India Limited are listed shares and therefore even if a consideration had been charged for the transfer of the 74% share, the income arising therefrom would be exempt by virtue of the provisions of section 10(38) of the said Act. The A.A.R. also observed that for the same reason this was a complete answer to the revenue's argument that the transactions were part of a design of 'treaty shopping' as having regard to the DTAA between India and Singapore, the capital gain would only be taxed at Singapore and not in India. Thus, according to the revenue, the transaction was proposed to be entered into to avoid being taxed in India. No interference is called for with the ruling given by the A.A.R.
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