May 20, 2022
Foreign investors coming from Mauritius are often denied capital gains tax relief on the grounds that persons controlling the tax haven companies are based in other countries. This may change now. One such attempt by the Income tax (I-T) department to lift the 'corporate veil' was struck down this week by a court which ruled that the tricky subject of 'beneficial ownership' (BO) of the Mauritian entity cannot be linked to capital gains. The ruling by Income tax Appellate Tribunal (ITAT), a quasi-judicial authority, relating to Blackstone FP Capital Partners Mauritius V Ltd, pertains to financial year 2015-16 when it booked capital gains of over ?900 crore after selling stocks of CMS Info Systems.
