The respondent, a Mauritius-based company, acquired shares of Flipkart Singapore between October 2011 and April 2015. It later transferred them to a Luxembourg entity. The High Court held that the respondent had economic substance, as it incurred expenses of USD 1,063,709 and had liabilities and shareholders\u2019 equity of USD 1,764,819,299. The mere connection of two board members with the TG Group did not establish it as a puppet entity under the LOB clause of the India\u2013Mauritius DTAA. The Court held that, as no tax rate was prescribed under Art. 13(3B) for gains from shares acquired before 1-4-2017, the grandfathering provision in Art. 13(3A) applied, excluding the transaction from capital gains tax. The Supreme Court stayed the High Court order pending disposal of the Revenue\u2019s SLP. (AY 2018-19)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 245R: Advance rulings \u2013 Non-resident \u2013 Entitlement to benefits under DTAA \u2013 Transfer of shares \u2013 Capital gains \u2013 Transfer of shares in a foreign company by one non-resident to another \u2013 Treaty shopping \u2013 Lifting the corporate veil \u2013 Department must establish treaty abuse \u2013 Share transaction grandfathered under Article 13(3A) \u2013 Order of AAR holding transaction as tax avoidance arbitrary and illegal \u2013 Assessee entitled to DTAA benefit \u2013 SLP filed by Revenue \u2013 Operation of order stayed \u2013 DTAA \u2013 India\u2013Mauritius [S. 45, 90, 119, 245R(2), Arts. 13(3), 13(3A), 27A]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","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":""},"categories":[21],"tags":[],"class_list":["post-55813","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ewd","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=55813"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55813\/revisions"}],"predecessor-version":[{"id":55814,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55813\/revisions\/55814"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=55813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=55813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=55813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}