https://www.taxtmi.com/caselaws?id=787449 Overseas subsidiaries funded through borrowings and used primarily to reinvest in Indian group companies constitute prohibited round tripping where they lack bona fide business activity. Direct investment abroad under the foreign-security regulations requires the overseas joint venture or wholly owned subsidiary to conduct genuine business, with additional conditions applying to financial-services entities. Routing funds through nominally capitalised overseas special-purpose vehicles, obtaining overseas loans and returning the funds to India through investments, including redeemable preference shares, circumvents applicable foreign-exchange regulatory norms. The contravention of the Foreign Exchange Management Act and the overseas-investment regulations was upheld, and the appeals were dismissed. en-us Wed, 24 Sep 2025 00:00:00 +0530 Fri, 06 Mar 2026 08:30:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=787449 Overseas subsidiaries funded through borrowings and used primarily to reinvest in Indian group companies constitute prohibited round tripping where they lack bona fide business activity. Direct investment abroad under the foreign-security regulations requires the overseas joint venture or wholly owned subsidiary to conduct genuine business, with additional conditions applying to financial-services entities. Routing funds through nominally capitalised overseas special-purpose vehicles, obtaining overseas loans and returning the funds to India through investments, including redeemable preference shares, circumvents applicable foreign-exchange regulatory norms. The contravention of the Foreign Exchange Management Act and the overseas-investment regulations was upheld, and the appeals were dismissed. Case-Laws FEMA Wed, 24 Sep 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787449