October 2023
Section 9 r.w. Article 13 of India-Mauritius DTAA – Where Mauritius company had acquired CCPS prior to 1.4.2017 but they were converted into equity shares after said date, without there being any substantial change in rights of the assessee, LTCG derived from the sale of such equity shares were within the ambit of Article 13(4) of India-Mauritius DTAA, and hence, was exempt from tax in India.
By Geeta Jani , Dhishat B. Mehta , Bhaumik Goda
Chartered Accountants
7. Sarva Capital LLC vs. ACIT
[2023] 153 taxmann.com 618 (Delhi-Trib.)
ITA No.: 2289/Del./2022
A.Ys.: 2019–20
Date of Order: 10th August, 2023
Section 9 r.w. Article 13 of India-Mauritius DTAA – Where Mauritius company had acquired CCPS prior to 1.4.2017 but they were converted into equity shares after said date, without there being any substantial change in rights of the assessee, LTCG derived from the sale of such equity shares were within the ambit of Article 13(4) of India-Mauritius DTAA, and hence, was exempt from tax in India.
FACTS
The assessee was a tax resident of Mauritius. It was incorporated with the objective of investing in India in education, agriculture, healthcare, microfinance institutions and other financial services sectors. Mauritius tax authority had granted TRC to the assessee. The assessee had invested in CCPS of ‘V’ prior to 1st April, 2017. CCPS were converted into equity shares of ‘V’ as per the terms of their issue without there being any substantial change in the rights of the assessee. The conversion resulted in only a qual
