AAR ruling is binding on the revenue authorities despite any contrary ruling in other tax payer’s case

Facts Prudential Assurance Company Ltd. (Prudential) is a foreign company incorporated in United Kingdom and is engaged in the business of Insurance. Prudential registered with the Securities and Exchange Board of India as a sub-account of a Foreign Institutional Investor (FII). Prudential had made an application to the Authority for Advance Rulings (AAR) to determine whether income arising from its activities of purchase and sale of shares will be liable to tax in India. The AAR by order dated 30 April 2001 ruled that the activity of purchase and sale of shares by Prudential was in the ordin...