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TMI Blog2012 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany incorporated in Mauritius is a 100 percent subsidiary of Dynamic India Fund II (DIF-II), another company based in Mauritius. According to the applicant, the applicant company was set up to invest in growing sectors in India. The funds required for investments in India are pooled from various individual and institutional investors from different parts of the world by DIF-II and invested as capital into DIF-I, the applicant. The said funds are invested in India by the applicant. 2. The applicant has a Tax Residency Certificate from Mauritius valid upto 14-7-2011. Its validity has since been extended till 14.7.2012. It is registered as a Foreign Venture Capital Investor. It has obtained on 17-9-2004, a license from the Securities Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. Moreover, the ruling is sought on a proposed transaction of sale and I do not find any reason to entertain this objection at this stage. 7. It was then contended that only 4 out of 55 investors (individuals plus institutions) were from Mauritius and that this was a case of routing the investments by the investors through Mauritius so as to evade taxation on the capital gains that they would make and such an attempt should not be allowed to succeed. This is really a scheme for avoidance of tax in India. On the materials now available, it is not possible to accept this contention in view of the decision in Union of India v. Azadi Bachao Andolan . 8. It was then contended that only two of the Directors of the applicant were fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant being a tax resident of Mauritius in the light of the tax residency certificate produced by it, going by the decision in Union of India v. Azadi Bachao Andolan , it has to be held that the gain that may arise to the applicant is not chargeable to tax in India. 11. Since chapter X-A introduced into the Act by the Finance Act 2012 is to come into force only on 1.4.2013, section 90(2A) of the Act has no relevance at this stage. Same is the position regarding section 90(4) of the Act introduced. As and when they come into force, it will be open to the revenue to consider those aspects; notwithstanding this ruling. 12. I, therefore, rule on question number 1, that the capital gains from the proposed sale of shares is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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