Case Law Details
Case Name : Re. Groupe Industrial Marcel Dassault (AAR Delhi)
Appeal Number : [In application No. AAR/846/2009]
Date of Judgement/Order : 28/11/2011
Related Assessment Year :
Courts :
Advance Rulings
Become a Premium member to Download.
If you are already a Premium member, Login here to access.
Sponsored
In Re Groupe Industrial Marcel Dassault (AAR)– It is true that a Double Taxation Avoidance Convention has to be construed on its terms. On a literal construction paragraph 5 would lead to the position that the transfer of shares of ShanH in this case, can be taxed only in France. But the contention of the Revenue is that the situs of the underlying assets cannot be ignored and the underlying assets and controlling interest are that of a company incorporated in India and a resident of India.
We have found that what is involved in this transaction, is an alienation of the assets and controlling interest of an Indian company. It will logically follow from our finding that the transactions gone through are part of a scheme for avoidance of tax and the scheme has to be ignored, that the gain from the transaction is taxable in India. Even then, it is not an alienation of the shares of an Indian company, on a literal interpretation of paragraph 5 of Article 14 of the treaty. But a purposive construction of the said paragraph of the treaty leads us to the conclusion that the capital gains arising out of the transaction is taxable in India. The essence of the transaction takes within its sweep various rights including a change in the controlling interest of an Indian company having assets, business and income in India.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Sponsored
Kindly Refer to
Privacy Policy &
Complete Terms of Use and Disclaimer.