AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 771
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....int venture company in 1984. HHML is a public listed company existing under the laws of India. The Applicant acquired shares in HHML by direct allotment of shares in the year 1985, right issue of shares in the year 1987 and bonus shares issued in the year 1995 and 1998. This resulted in the Applicant's holding of 1,03,83,750 equity shares [of Rs. 10 each] in the total equity capital of HHML as on 28.09.1998.Thereafter, on 26.03.2001,each share of HHML was sub-divided into 5 equity shares of Rs. 2 each, thereby resulting in Applicant's ownership of 5,19,18,750 equity shares [of Rs. 2 each] in the total equity capital of HHML, (being 26%), as on the date of such sub-division and thereafter, till the date of transfer of the shares. The Applicant purchased the shares issued under direct allotment as well as right issue in convertible foreign exchange. 2.1 On 22.01.2011, the Applicant entered into shares transfer agreement with the Indian Partners in order to sell its stake in HHML, which were held by the Applicant for more than 12 months as on the date of the transfer, and accordingly were long-term capital asset on the date of the transfer. The resultant capital gain tax applicable w....
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....Therefore, irrespective of whether or not the Applicant is entitled to claim benefit of second proviso to Section 48 of the Act, the benefit under the proviso to Section 112 (1) of the Act should be allowed to the Applicant as long as the provisions contained in second proviso to Section 48 are not being given effect to by the Applicant. 4.2 It is further submitted that its case is squarely covered in its favour by the judgment of the Hon'ble High Court of Delhi in the case of Cairn UK Holdings Ltd. vs. DIT, 2013 (359) ITR 268, wherein the Ruling of this Authority in the case of Timken France, In Re (2007) 212 CTR 349 (AAR) was affirmed by the Hon'ble High Court of Delhi. This has been followed by this Authority in the case of Pan-Asia iGate Solutions, Mauritius, In Re 2014 SCC Online AAR 13. Further, reliance is placed on the Rulings of this Authority in the following cases: Fujitsu Services Ltd., In re, (2009) 225 CTR 121 (AAR); Four Star Oil & Gas Co., In re, (2009) 223 CTR 121 (AAR); CompagnieFinanciereHamon, In re, (2009) 221 CTR 734 (AAR); Burmah Castrol Plc., In re, (2009) 221 CTR 63 (AAR). The order of the ITAT in the case of DDIT vs. Mitsubishi Motors Corp, 2016 SCC, date....
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....ures, they being excluded from the benefit of the first proviso and the second proviso. The level playing field has been provided to the resident assessees and that is what is done by the proviso in Section 112 in respect of listed securities units and zero coupon bonds. The proviso explicitly mentions that the calculation of the 10% of the Capital Gain shall be before resorting to indexation contemplated by the second proviso to Section 48. That means an assessee not coming under the first proviso to Section 48 in respect of specified assets is given protection against inflation which has already been given to a non-resident, in respect of specified assets, thus achieving a level playing field. 5.3 In case of non-resident assessees, gain from sale of shares in or debentures of an Indian company continues to attract the first proviso to section 48 and that assessee to the extent of those assets is kept out of the benefit of the second proviso. A set of securities of those to whom the second proviso to section 48 applied that had been kept out of the purview of the second proviso by the third proviso, have been brought in for relief. This does not justify an interpretation that wha....
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....and accepted in Timken France SAS. Our reasons are elucidated below. 20. Language of proviso to section 112(1) syntactically and grammatically mandates one interpretation. If one squarely focuses and orates the words used in the proviso and interprets them without extracting or subtracting any phrase or word, a non-resident assessee is entitled to benefit of the said provision. The proviso to section 112(1) of the Act does not state that an assessee, who avails benefits of the first proviso to section 48, is not entitled to benefit of lower rate of tax @ 10%. The said benefit cannot be denied because the second proviso to section 48 is not applicable. The stipulation for taking advantage of the proviso to section 112(1) is that the aggregate of long-term capital gains to the extent it exceeds 10% of the amount of capital gains, should be before giving effect to the provisions of second proviso to section 48. Inflation indexation shall be ignored. In case the Legislature wanted to deny the said advantage/benefit where the assessee had taken benefit of the first proviso to section 48, it was easy and this would have been specifically stipulated, that an assessee, who takes advantag....
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....ilal, (1991) 190 ITR 56 (BHC); CIT vs. P. Rajendran (1981) 127 ITR 810 (Ker); S.M. Wahi vs. DIT, (2010) 324 ITR 269 (DHC); CIT vs. Bradford Trading Co. Pvt. Ltd. vs. DCIT (2003) 261 ITR 222; and VA Vasumathi vs. CIT (1980) 123 ITR 94. In light of the above facts and cases, the expenditure incurred by the Applicant is liable to be deducted under Section 48 of the Act. 7.1 The Revenue had in its earlier report dated 28.5.2013 stated that the Applicant was eligible to claim deduction for expense in connection with the transfer of shares as per the provision of section 48. In a later report it was contended that the said expenses were neither wholly and exclusively in connection with the transfer of shares nor related to the cost of acquisition or improvement, and hence were not allowable. They were only for the convenience of the parties to the transaction. 7.2 We have considered the nature of expenses incurred. A perusal of the cases cited and the provision contained in section 48 shows that the words "wholly and exclusively" do not connote "necessarily". If the expenses have been incurred in connection with the transfer, they are to be allowed. The words "in connection with" are o....