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TMI Blog2012 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... ther company based in Mauritius. According to the applicant, the applicant company was set up to invest in growing sectors in India. The funds required for investments in India are pooled from various individual and institutional investors from different parts of the world by DIF-II and invested as capital into DIF-I, the applicant. The said funds are invested in India by the applicant. 2. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the taxability in India arising out of the sale of the shares it holds in Ranbaxy Fine Chemicals Limited. 5. The applicant submits that being a tax-resident of Mauritius, it is entitled to claim the benefit of the India-Mauritius Double Taxation Avoidance Convention (DTAC) by virtue of section 90(2) of the Income-tax Act. Article 13 of the DTAC would govern such a transaction and under para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a case of routing the investments by the investors through Mauritius so as to evade taxation on the capital gains that they would make and such an attempt should not be allowed to succeed. This is really a scheme for avoidance of tax in India. On the materials now available, it is not possible to accept this contention in view of the decision in Union of India v. Azadi Bachao Andolan. 8. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue that the control of the applicant lies in India. 9. The argument that unless the capital gain is actually taxed in Mauritius the DTAC would not apply in the context of section 90(1) and section 90(2) of the Act, though attractive, cannot be entertained in view of the decision in Union of India v. Azadi Bachao Andolan. Even though capital gain is not actually taxed in Mauritius, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Same is the position regarding section 90(4) of the Act introduced. As and when they come into force, it will be open to the revenue to consider those aspects; notwithstanding this ruling. 12. I, therefore, rule on question number 1, that the capital gains from the proposed sale of shares is not chargeable to tax in India in view of paragraph 4 of Article 13 of the India-Mauritius DTAC and on que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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