{"id":24054,"date":"2022-12-24T10:18:42","date_gmt":"2022-12-24T10:18:42","guid":{"rendered":"https:\/\/www.africa-press.net\/mauritius\/all-news\/tax-treaty-benefit-does-beneficial-ownership-matter-itat-to-decide"},"modified":"2022-12-24T10:55:43","modified_gmt":"2022-12-24T10:55:43","slug":"tax-treaty-benefit-does-beneficial-ownership-matter-itat-to-decide","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mauritius\/all-news\/tax-treaty-benefit-does-beneficial-ownership-matter-itat-to-decide","title":{"rendered":"Tax Treaty Benefit: Does Beneficial Ownership Matter? ITAT To Decide"},"content":{"rendered":"

Africa-Press – Mauritius. <\/strong><\/span>The Mumbai bench of the Income Tax Appellate Tribunal has recalled its earlier order in the Blackstone FP Capital Partners Mauritius V Ltd. case. The ITAT will now determine whether the taxpayer needs to be the beneficial owner to avail the benefit of capital gains tax exemption under the India-Mauritius treaty.<\/p>\n

In May this year, the ITAT had sent the case back to the revenue department to determine whether the concept of \u2018beneficial ownership\u2019 is inbuilt in the tax treaty. But on Blackstone’s application, this week the appellate tribunal said that this question should have been decided by it.<\/p>\n

The issue pertains to applicability of the concept of beneficial ownership of shares while deciding applicability of capital gains exemption under Article 13 of India-Mauritius Double Taxation Avoidance Agreement.<\/p>\n

The tax department had denied treaty benefit to Blackstone Mauritius on capital gains of over Rs 900 crore from sale of shares of CMS Info Systems. The department lifted the corporate veil and found that the beneficial owners of shares were located in Cayman Islands.<\/p>\n

Thus, it denied the treaty benefit to the Mauritius entity. In its order this week, the ITAT said that it will decide on the relevance of beneficial ownership to vis-a\u0300-vis capital gains exemption.<\/p>\n

It realised that not deciding the question of law when all the relevant facts were before it was a mistake apparent from record. So, the ITAT exercised its power to recall its order for the limited purpose of deciding the legal question.<\/p>\n

In its order, the tribunal referred to a consultation paper by global expert Philip Baker KC to point out that there is \u2018limited support\u2019 for the inclusion of beneficial ownership limitation into capital gains exemption provision.<\/p>\n

It also noted the Canadian Supreme Court\u2019s ruling in Alta Energy in the context of applicability of General Anti-Avoidance Rule where it was observed, \u201cIndeed, beneficial ownership is utterly foreign to Art. 13\u201d.<\/p>\n

The ITAT ruling on this issue will decide the fate of numerous such transactions with regards to tax exemption on disposal of investments made via the Mauritius route.<\/p>\n

For More News And Analysis About Mauritius<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mauritius. The Mumbai bench of the Income Tax Appellate Tribunal has recalled its earlier order in the Blackstone FP Capital Partners Mauritius V Ltd. case. The ITAT will now determine whether the taxpayer needs to be the beneficial owner to avail the benefit of capital gains tax exemption under the India-Mauritius treaty. In […]<\/p>\n","protected":false},"author":84,"featured_media":24053,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[233,245,241],"class_list":["post-24054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-mauritius","tag-mauritius"],"yoast_head":"\nTax Treaty Benefit: Does Beneficial Ownership Matter? ITAT To Decide - Mauritius<\/title>\n<meta name=\"description\" content=\"The Mumbai bench of the Income Tax Appellate Tribunal has recalled its earlier order in the Blackstone FP Capital Partne ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mauritius\/all-news\/tax-treaty-benefit-does-beneficial-ownership-matter-itat-to-decide\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Treaty Benefit: Does Beneficial Ownership Matter? 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