AI Drafter 
TaxTMI 
TaxTMI 
2005 (7) TMI 32
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....). The applicant is a limited company incorporated in Great Britain and is a tax resident of the United Kingdom (U.K). The applicant was initially a trustee for a group of funds including Invesco Perpetual Global Smaller Companies Fund (Invesco Funds). Those funds were managed by Invesco Funds Managers Ltd., a company incorporated in Great Britain and a tax resident of U.K. The said funds were constituted as Unit Trusts under various trust deeds for the purpose of providing an investment vehicle to investors to earn profits. The applicant was registered with the Securities and Exchange Board of India (SEBI) as a Foreign Institutional Investors (FIIs) under the SEBI (Foreign Institutional Investors) Regulations, 1995 and made investments in Indian securities in accordance with the said regulations. The applicant states that it does not have a branch office or a place of business in India nor does it have any employee of its own or any investment advisor or agent in India. The transactions of purchase or sale of securities in India are carried on through brokers. The Indian securities of the applicant are held by the local custodian - "Citi Bank, Mumbai" -, which renders services to ....
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....pplicant was put to proving the same. The material portion of the comments contained in para 9 reads as follows:- "The assertions made by CTCL above are questions of fact, and as such, may be determined by Id.AAR. The issue of transfer of Indian securities will arise if the applicant fails to establish that:- • as trustee of the unit trusts it was the 'owner' of the Indian securities. • as 'Depository' of the OEICs, it still is the 'owner' of the Indian securities. • the scheme of arrangement is tax exempt in the UK . • It is permitted under the UK regulations to act as a 'Depository' and Trustee. In a case of such failure, it is submitted that the Authority may be pleased to hold that the provisions of sec. 2(47) will be attracted and capital gains will arise as a transfer will have taken place." 5. Mr. Porus Kaka, learned counsel appearing for the applicant, would submit that the reorganization of the applicant in U.K. is not a transaction chargeable to tax under the Indian Income-tax Act, nor would it result in transfer, within the meaning of section 2(47) of the Act, of Indian securities held by the applicant as all the conditions enumerated in para....
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....treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment; ] [or] • any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or • any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immoveable property. Explanation - For the purposes of sub-clauses (v) and (vi), "immoveable property" shall have the same meaning as in clause (d) of section 269UA.] At the outset it may be mentioned that clauses (iii) to (vi) thereof are not relevant here. If the reorganisation falls under either clause (i) or clause (ii) of sub-section 47, it would amount to transfer. Admittedly in this case there is neither sale or exchange or extinguishments of any right in the shares held by the applicant in Indian companies. However, the Commiss....
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....nal Asia and Australasia Fund • Citicorp Trustee Company Limited as Trustee for INVESCO Perpetual Global Dynamic Theme Fund to Citicorp Trustee Company Limited as Depository for INVESCO Perpetual Global Dynamic Theme Fund • Citicorp Trustee Company Limited as Trustee for INVESCO Perpetual International Equity Fund to Citicorp Trustee Company Limited as Depository for INVESCO Perpetual International Equity Fund • Citicorp Trustee Company Limited as Trustee for INVESCO Perpetual Asian Fund to Citicorp Trustee Company Limited as Depository for INVESCO Perpetual Asian Fund Please refer to the letter dated May 07, 2004 received from your custodian Citibank regarding the above matter. We do not have any objection to the change in name of the sub-accounts from:- OLD NAME NEW NAME Citicorp Trustee Company Limited as Trustee for INVESCO Perpetual Global Smaller Companies Fund (1997088) Citicorp Trustee Company Limited as Depository for INVESCO Perpetual Global Smaller Companies Fund Citicorp Trustee Company Limited as Trustee for INVESCO Perpetual Pacific Fund (1997092) Citicorp Trustee Company Limited as Depository For INVESCO Per....
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....isions of "Income and Corporation Taxes Act 1988" (ICTA) relating to taxation of income and taxation of capital gains which is governed by the "Taxation of Chargeable Gains Act 1992" (TCGA) to show that the reorganisation was not taxable in UK. It will be apt to refer to section 703, 704 and 707 of the ICTA. Section 704 enumerates circumstances under which any tax advantage derived by a person within the meaning of section 703 could be denied or reversed unless the person shows that the transaction was carried out either for bonafide commercial reasons or in the ordinary course of making or managing investments and in either case the main object is not to obtain a tax advantage, otherwise provisions of section 703 deprive him of tax advantages derived by him. Section 707 is an enabling provision under which an application may be made to the Board requesting it to notify that the provisions of sub-section(3) of section 703 will not apply to the proposed transaction. We may also refer to the relevant provisions of TCGA. Section 126 of the TCGA defines the reorganisation to mean, inter alia, conversion of shares of one class into another within the same company. Section 127 of T....
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.... under the UK regulations to act as a 'Depository' and Trustee". To show that this condition is satisfied it would suffice to refer to the extract of Financial Services Authority Register. FSA Register is a public record of financial services firms and other bodies which fall under its regulatory jurisdiction as defined in the Financial Services & Markets Act 2000 of UK , which came into force on December 1, 2001 . It shows that the applicant is registered as FSA and that it has necessary permission to act as a trustee and a depository, which reads as under:- " Financial Services Authority Register 122206 Citicorp Trustee Company Ltd. Permissions Activity Name: Acting as the depository or sole director of an open-ended investment company Customer type: All Limitation: Limited to acting as depository of an ICVC. Activity Name : Acting as trustee of an authorized unit trust scheme Customer type All Activity Name : Agreeing to carry on a regulated activity Limitation : Limited to carry on regulated activities. Activity Name : Arranging safeguarding and administration of assets Investment instrument Certificates representing certain security Commodity F....