Superb Mind Holdings Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that long term capital gain (LTCG) on sale of shares in case of the assessee company, being resident of Mauritius, is not liable to be taxed in India.
Facts- Assessee is registered in Mauritius and is holding tax residency certificate of Mauritius. The assessee is engaged in the business of making investments. The assessee had made investment in Indian company namely Pearl Retail Solutions Pvt. Ltd. The assessee purchased 204199 shares in AY 2011-12 and 1,10,800 shares of the said company in AY 2012-13. During the period relevant to assessment year under appeal, the assessee transferred 69,999 shares of M/s. Pearl Retail Solutions Ltd. to M/s. LEI Singapore Holdings Pte. Ltd., for a consideration of Rs. 40,02,37,407/-. LEI Singapore Holdings Pte. Ltd. deducted tax at source on the aforesaid payments @10.92% u/s. 195 of the Act. The assessee claimed refund of TDS so deducted.
The assessee’s claim of refund of TDS Rs. 4,37,05,930/- has been rejected by the department, hence, the present appeal.
Conclusion- Held that similar transaction of transfer of shares of Pearl Retail Solutions Pvt. Ltd. was undertaken by the assessee in AY 2018-19. The assessee claimed refund of TDS deducted on sale of shares. The matter travelled to the Tribunal, the Coordinate Bench after considering the facts of the case, provisions of Article 13(4) of the India-Mauritius DTAA and placing reliance on the decision rendered in the case of Bid Services Division (Mauritius) Ltd. vs. Authority of Advance Ruling (Income Tax) 453 ITR 461 (Bom) and the decision of Hon’ble Apex Court in the case of Vodafone International Holding BV vs. UOI 341 ITR 1 held that long term capital gain on sale of shares in the case of assessee is not liable to be taxed in India.
