ITAT held that the Mauritius-incorporated assessee was not a tax...

ITAT held that the Mauritius-incorporated assessee was not a tax resident of India under section 6(3) of the Income Tax Act. The tribunal determined that control and management was exercised by the board of directors in Mauritius, with all 82 board meetings held in Mauritius since inception. The tribunal rejected revenue's contentions that the assessee was a sham entity or conduit, finding commercial substance in the investment holding activities. The liquidation of ETIL was undertaken for legitimate commercial purposes following RBI rejection of pledge arrangements, not for tax avoidance. Consequently, the assessee qualified for benefits under Article 13(4) of the India-Mauritius DTAA, rendering capital gains from VEL share sales non-taxable in India.