{"id":3040,"date":"2011-04-19T19:19:09","date_gmt":"2011-04-19T13:49:09","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=3040"},"modified":"2011-04-19T19:19:09","modified_gmt":"2011-04-19T13:49:09","slug":"richter-holding-ltd-vs-adit-karnataka-high-court-corporate-veil-can-be-lifted-to-tax-sale-of-foreign-co-shares-by-one-non-resident-to-another-non-resident-if-foreign-co-holds-shares-in-indian-co","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/richter-holding-ltd-vs-adit-karnataka-high-court-corporate-veil-can-be-lifted-to-tax-sale-of-foreign-co-shares-by-one-non-resident-to-another-non-resident-if-foreign-co-holds-shares-in-indian-co\/","title":{"rendered":"Richter Holding Ltd vs. ADIT (Karnataka High Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (richter_foreign_co_shares_transfer.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nCorporate Veil can be lifted to tax sale of Foreign Co shares by one Non-Resident to another Non-Resident if Foreign Co holds shares in Indian Co
\n<\/strong><\/p>\n

The assessee, a company based in Cyprus<\/em>, bought shares (100% together with another company) of a UK company<\/em> called Finsider International, from another UK company<\/em>. Finsider, UK, held 51% shares of Sesa Goa Ltd, India<\/em>. The AO took the view that the 51% shares in Sesa Goa held by Finsider, UK, constituted a capital asset u\/s 2(14) and that the transfer of the shares of Finsider amounted to a transfer of the said 51% shares of Sesa Goa<\/em> and that the assessee was liable to deduct tax at source u\/s 195 when it bought the shares of Finsider, UK. He accordingly issued a show-cause notice u\/s 201 seeking to treat the assessee as a defaulter. The assessee filed a Writ Petition to challenge the notice on the ground that as one non-resident had sold shares of a foreign company to another non-resident, there was no liability under Indian law<\/em>. HELD not accepting the assessee’s contention:<\/p>\n

What is under challenge is only the show-cause notice issued u\/s 195 … it may be necessary for the fact finding authority to lift the corporate veil to look into the real nature of transaction<\/strong> to ascertain virtual facts<\/strong>. It is also to be ascertained whether the assessee, as a majority shareholder<\/strong>, enjoys the power by way of interest and capital gains in the assets of Sesa Goa<\/strong> and whether transfer of shares in the case on hand includes indirect transfer of assets and interest in Sesa Goa<\/strong>.<\/p><\/blockquote>\n

\nSee also Vodafone International Holdings B.V. vs. UOI<\/a><\/strong> 329 ITR 126 (Bom) on the same point\n<\/div>\n","protected":false},"excerpt":{"rendered":"

What is under challenge is only the show-cause notice issued u\/s 195 … it may be necessary for the fact finding authority to lift the corporate veil to look into the real nature of transaction<\/strong> to ascertain virtual facts<\/strong>. It is also to be ascertained whether the assessee, as a majority shareholder<\/strong>, enjoys the power by way of interest and capital gains in the assets of Sesa Goa<\/strong> and whether transfer of shares in the case on hand includes indirect transfer of assets and interest in Sesa Goa<\/strong><\/p>\n

Read more ›<\/a><\/div>\n

<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,5],"tags":[],"class_list":["post-3040","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-high-court"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/3040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=3040"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/3040\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=3040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=3040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=3040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}