Case Law Details
Augustus Capital Pte Ltd Vs DCIT (ITAT Delhi)
On 27.03.2015, the appellant sold its entire shareholding in Accelyst to an Indian company, namely, Jasper Infotech Private Limited. The sale consideration was Rs. 41,24,35,969/-. The buyer, Jasper Infotech Private Limited, withheld taxes at source amounting to Rs. 17,84,19,800/- being 43.26% on the entire sales consideration.
Keeping in view the amended provisions of section 9(1)(i) of the Act, read with Explanations 5, 6 and 7, the assessee was of the firm belief that the transaction involving sale of shares of foreign company, which held investment in India, was not taxable.
During the course of assessment proceedings, the Assessing Officer asked the assessee to explain as to why capital gains arising from sale of shares from Accelyst to Jasper Infotech Private Limited should not be brought to tax in India u/s 9(1)(i) of the Act.
In response, the appellant company submitted detailed reply, which has been incorporated by the Assessing Officer in his assessment order. The main contention of the assessee was that Explanation 7 to Section 9(1)(i) of the Act states that the impugned transaction is not taxable.
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