Indo-Singapore DTAA Article 13(4) - Transfer of closely held shares of Indian company - Question transaction to be a sham - GAAR applicability 

Facts:

Assessee a Singapore resident with Tax residency certificate had acquired shares of a closely held Indian company in 2016 which were sold in assessment year 2018-19. The entire short term capital gains were claimed exempt due to operation of Article 13(4A) of DTAA. Revenue disagreed to the views of assessee alleging that the entire transaction lacked substance and was an evasionary sham. Besides they also invoked General Anti Avoidance Rules Section 101. Aggrieved assessee went in higher appeal to ITAT -

Held in favour of the assessee that the TRC of Singapore was conclusive and hence they were entitled to benefit of Article 13(4A) with no capital gains taxable in India. GAAR cannot be invoked as Rule 10U(1)(a) tax threshold of Rs. 3 crores not breached + 10U(1)(d) excludes shares acquired prior to 1-4-2017. 

Applied: Delhi High Court writ petition Black Stone Capital Partners, Singapore in W.P. (C) 2562/2022, dated 30-1-2023

Case: Reverse Age Health Services Pte. Ltd. v. DCIT  2023 TaxPub(DT) 1115 (Del-Trib)