9911796707
TMI Blog2021 (9) TMI 1530X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that the entire gains arising to the applicant on the sale of equity shares and CCDs are not exempt from capital gain tax in India under DTAC with Mauritius. The gains arising on the sale of CCDs being interest within the meaning of Section 2(28A) of the Act and Article 11 of the DTAC and are taxable as such. Against the above ruling of AAR the assessee filed writ petition before Hon ble Delhi High Court [ 2014 (8) TMI 9 - DELHI HIGH COURT] has decided the issue against the findings of the AAR and has held that pre-mature exit options as recorded in the SHA and the minimum return assumed by Vatika on its investment are clearly commercial agreements between the parties. These by itself do not change the legal nature of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) The present appeal has been filed by the revenue against the order of ld. CIT (A)-43, New Delhi dated 30.10.2017. 2. Following grounds have been raised by the revenue: (i) Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in holding that the gains arising to the assessee on the transfer of compulsorily Convertible Debentures (CCDs) to M/s Vatika Ltd. is in the nature of capital gain and not in the nature of interest income as held by the Assessing Offsicer on the basis of Advance Ruling dated 21.03.2012 in AAR no. 1048 of 2011 pronounced by the Hon ble Authority for Advance Ruling. (ii) Whether on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Advance Ruling (AAR) while dealing with Article 11 and Article 13. The Hon ble AAR with regard to Section 2(28A) and Article 11 of the DTAC held as under: 19. In conclusion, Article 11 deals with the treatment of income from debt-claims of every kind, whereas, Article 13 deals with gains from the alienation of any property. Article 11 being a specific provision will be applicable in the present case where Vatika has paid a fixed predetermined return to the Applicant Here we may note that in our opinion, Vatika and SHT are one and the same. Hence the amount paid by Vatika is clearly towards the debt that was taken by SHT from the Applicant. Hence the appreciation in the value of CCDs is clearly payment of interest and is taxable und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate veil to treat the JV Company and Vatika as Single entity. In view of the above, the writ petition is allowed and the impugned ruling is set aside. 6. The AO held that the revenue has not accepted the above order of Hon ble Delhi High Court and has filed SLP before Hon ble Supreme Court which is pending for adjudication and made addition on the amount in contravention to the existing ruling of the Hon ble Jurisdictional High Court. The ld. CIT (A) gave relief following the decision of the Hon ble High Court. 7. We find from the grounds raised by the revenue that the appeal has been filed before the Tribunal solely based on the foundation that the SLP filed by the revenue has been admitted and notice has been issued in this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
