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 Agre

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