Authority for Advance Rulings (AAR): Capital Gain
arising on transfer of shares of Indian listed company was held to
be exempt from tax in India in the hands of a company resident of
Mauritius. Transfer pricing provisions were held to be applicable
to such transaction. Foreign company to be subject to MAT
provisions. AAR can correct its earlier ruling and is bound only by
the decisions of the Supreme Court. (Castleton Investment Limited -
AAR No.999 of 2010)
Facts:
Castleton Investment Limited (the applicant), a company resident
of Mauritius, was a part of Glaxo Smithkline group of companies
(GSK group). Glaxo Smithkline Pharmaceuticals Limited (GSKPL), an
Indian listed company, was also a part of the GSK group. The
applicant had acquired shares in GSKPL in the year 1993 and 1996.
The applicant has proposed to transfer the shares of GSKPL to GSK
Pte. Ltd. (GSK Pte.), the Singapore Company, for cash consideration
at fair market value. The transfer of shares is
