TaxTMI 
TaxTMI 
2016 (9) TMI 162
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....nsei Bank Limited, Japan ('Shinsei Bank') which is listed on the Tokyo Stock Exchange. The applicant was the owner of 75% of the total paid-up capital of Shinsei Asset Management Company Private Limited, India [Shinsei AMC] (i.e. 72,27,000 shares) and 99.99% of total paid-up capital of Shinsei Trustee Company India Private Limited, India [Shinsei Trustee] (i.e. 3,99,996 shares). Shinsei AMC and Shinsei Trustee are the asset management and trustee company respectively of Shinsei Mutual Fund. Shinsei Bank is the sponsor and settler of Shinsei Mutual Fund, which was established as a trust vide trust deed dated 16 July 2008 executed between Shinsei Bank and Shinsei Trustee Company. Shinsei Asset, Shinsei Trustee and Shinsei Mutual Fund ....
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....on 115JB of the ITA? 3. According to the applicant Article 13 (4) of DTAA confers the power of taxation of the gains derived by a resident of a contracting state from the alienation of the specified property only in the state of residence i.e., Mauritius. The fact that capital asset is located in India is of no consequence. Under section 90 of the Act the taxpayer is entitled in law to seek the benefits under the OTAA if the provision therein is more beneficial than the corresponding provision in the domestic law. Thus, in the case of residents of Mauritius, capital gains arising on the sale of shares of Indian companies are taxable only in Mauritius and are not taxable in India. The applicant has relied on Circular No.682 dated 30th March....
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....The applicant has no such rights/responsibility in respect of share sale and raises suspicion about the legal, actual and beneficial capacity of the applicant in the scheme of transaction. (iii) Shinsei Bank Ltd. Japan has the sole responsibility for the conduct of the transaction and the Mauritius entities are mere nominee shareholders. (iv) The place of arbitration has primarily and implicitly been limited to Japan and/or India only and not the place of incorporation of the Applicant, i.e. Mauritius. (v) Section 3.2 of the SPA provides that the revision of composition of Board of the AMC and Trustee Company are to be notified by the Purchaser to the parent Shinsei Bank Ltd., Japan and not to the applicant. (vi) Tax indemnification and....
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....ndolan has no relevance to the facts of the present case as the circulars were issued in the context of extending the benefits of the Tax Treaty to the investments made in India by Mauritian Entities. However, these circulars would not apply where the investments are made in India by non* Mauritian Entities. 6. In its rebuttal the applicant has distinguished the facts of this case with the facts in the case of Aditya Birla Nuvo as under:- a. In the case of Aditya Birla, the founder (AT&T, USA) was vested with the control of the JV company, namely power to direct the management and policies. AT&T, USA had paid for and subscribed to the shares of the JV Company in India and obtained the shares in the name of AT&T Mauritius as a "permitted t....
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.... be examined from share purchase agreement and other documents filed by the applicant. Sinshei Bank is a party to, the share purchase agreement because it is the sponsor and settler of the mutual fund in India and as required under the mutual funds regulations, Sinshei Bank Ltd. executed a trust deed dated 16. 7.2008 with the trustee company whereby Sinshei Bank Ltd. had established .the mutual fund and contributed to the initial corpus. As Sinshej Bank was the existing sponsor it was required to be part of the SPA for transfer of the sponsorship to the new sponsor i.e. Daiwa Asset Management Company Ltd. It is also noticed that in terms of mutual fund regulation the trustee Sinshei Bank Ltd. is subject to certain requirements and responsib....