HIGH COURT OF DELHI
Director of Income-tax (International Taxation), Delhi
Versus
Goodyear Tire & Rubber Company
W.P.(C) NO. 8295 of 2011
FEBRUARY 27, 2013
JUDGMENT
Badar Durrez Ahmed, J.
This writ petition has been filed by the department against the advance ruling order dated 02.05.2011 given by the Authority for Advance Rulings (A.A.R). The crux of the matter is that 74% shares of Goodyear India Limited were held by a USA company by the name of Goodyear Tire & Rubber Company. The said USA company has a 100% subsidiary in Singapore by the name of Goodyear Orient Company (Pte) Limited. Both the USA company as well as the Singapore company had approached the A.A.R. with respect to the tax liability of the proposed transfer of the said 74% share-holding of the USA company in Goodyear India Limited Company to its 100% subsidiary in Singapore. The A.A.R. after examining the various provisions of the Income-tax Act, 1961 (hereinafter referred to as the ‘said Act’) has ruled that there would be no tax liability on either the USA company or the Singapore company.
2. One of the points considered by the A.A.R. was that the transfer of the 74% shares to the Singapore company, which was without any consideration, even if the same was for consideration would be exempted from income-tax in view of the specific provisions of section 10(38) read with Chapter VII of the Finance (No.2) Act, 2004 . We may point out that Chapter VII of the said Finance (No.2) Act, 2004 pertains to securities transaction tax. Section 97(13) of the said Finance Act defines ‘taxable securities transaction’ in the following manner:-
“(13) “taxable securities transaction” means a transaction of –
