Taxability of capital gains on shares by a Singapore subsidiary denied treaty relief; gains held taxable in India under source rule.

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....Taxability of capital gains arising on sale of equity shares/CCDs by a Singaporeincorporated subsidiary was examined under the India-Singapore DTAA. The tribunal found the entity to be a shell/conduit lacking commercial substance-no office, employees, or operating costs-and held that mere possession of a tax residency certificate is insufficient. Applying the substanceoverform approach, the limitationonbenefits (LOB) provision was attracted, denying treaty relief. Consequentially, the capital gains were held taxable in India under the source rule and treaty benefits under the India-Singapore DTAA were disallowed.....