Mauritian Entity Wins Tax Exemption in Share Sale to Indian Firm; Validates Tax Residency Certificate and Treaty Benefits.

Legal dispute concerning the taxability of capital gains arising from the sale of shares by a Mauritian entity to an Indian company. The central issues revolve around the applicability of the India-Mauritius Double Taxation Avoidance Agreement (DTAA), beneficial ownership of shares, substance over form principle, treaty shopping, and grandfathering clause under Article 13(3A) of the DTAA. The court held that the Mauritian entity cannot be considered lacking economic substance or engaged in treaty abuse solely based on its incorporation in Mauritius. Investments routed through Mauritius cannot be presumed illegitimate, and the issuance of a Tax Residency Certificate (TRC) by Mauritius authorities is sacrosanct. The court emphasized that trea..... .....

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