Place of effective management essential to substantiate the residential status of the Mauritius company while claiming the capital gains exemption in India

Facts The assessee (SMR Investments Limited) is a company incorporated in Mauritius with two shareholders (Mr. Suresh Rajpal and Ms. Mavis Tse Rajpal, who respectively hold 99% and 1% of the share capital) and three directors. During the financial year 2001-02, the assessee sold shares held in M/s HCL Technologies, an Indian company. The resultant long-term capital gains was claimed as exempt from tax in India in terms of Article 13(4) (See note- 1) of the Double Taxation Avoidance Agreement (DTAA) between India and Mauritius, on the premise that the assessee was a tax resident of Mauritius a...