Delhi Tribunal Rules On Pre-amended Mauritius DTAA

In the recent MIH India (Mauritius) Limited case, the Delhi Bench of the Income-tax Appellate Tribunal (the "Delhi Tribunal") held that the income earned by way of capital gains by a Mauritius tax resident on the sale of shares of an Indian company is not taxable in India under the pre-amended Article 13(4) of the double taxation avoidance agreement between India and Mauritius (the "Mauritius DTAA").

Background and facts

Article 13(4) of the Mauritius DTAA, inter alia, provides that the gain from the alienation of any property is taxable only in the Contracting State of which the alienator is a resident. On May 10, 2016, India's Central Board of Direct Taxes (the "CBDT") issued a press release