Andrew Mountbatten-Windsor, who was earlier stripped of his title of Prince, has now moved out of his home in Windsor, UK to the Sandringham Estate in Norfolk. The former prince left Royal Lodge on Monday night and is now staying at Wood Farm on the Sandringham Estate while his permanent home
Tiger in net, blackstone in woods: Supreme Court's Tiger Global tax ruling could influence Blackstone dispute
Blackstone faces a significant legal challenge from India's tax department. The dispute centers on tax residency and treaty benefits for foreign investors. This case, similar to the Tiger Global matter, will test the validity of tax residency certificates. The outcome could impact how offshore investors are taxed in India. Control and beneficial ownership are key points of contention.
After Tiger Global, all eyes are on Blackstone, another Wall Street biggie which is waging a high-profile legal battle with India's tax office. The feud, dealing with key questions on taxability of foreign investors and whose outcome may be partly influenced by the recent Supreme Court verdict on Tiger Global, is currently before the apex court.
The Income tax (I-T) department had questioned the tax residency status of the Singapore arm of Blackstone (which had sold shares of an India company) on the grounds that the Singapore entity was controlled by Blackstone US. Since the US parent was the true beneficial owner of Blackstone Singapore, the latter, according to the tax office, was not in position to claim benefits under the treaty between India and Singapore.
The treaty, similar to the one that India has with Mauritius, foreign direct as well as foreign portfolio investors from these jurisdictions do not have to pay capital gains tax on shares which were purchased before April 1, 2017.
Like the Tiger Global ruling, the court proceedings on Blackstone would test the significance of the tax residency certificate (TCR) that offshore investors receive from Singapore and Mauritius authorities to avoid tax.
""The key contention of the revenue is that the control and management of Blackstone Singapore lies in the US and that the funds for investment into India also came from the US. One will now have to see, in light of the Supreme Court judgment in Tiger Global, how this case is decided on the facts. The Revenue will strongly rely on Tiger Global in support of its stand, which Blackstone Singapore will have to defend when the matter comes up for hearing. Control and management and the source of funds for investments are among the main points of objections of tax authorities in most cases involving tax treaty applicability disputes. Most investors have relied on Azadi Bachao Andolan ruling of SC that had ruled that TRC was a sufficient proof of tax residency in light of CBDT Circular No. 789 of 2000, for India Singapore treaty benefit on capital gains tax.
However, the law was subsequently amended in 2013 to empower tax authorities to ask for documents other than TRC," said Sanjay Saghvi, partner at the law firm Khaitan & Co.
Blackstone, which won the case in the Delhi High Court, had argued that as per the double taxation avoidance agreement between India and Singapore, capital gain is taxed on the basis of 'legal ownership' and not on the basis of 'beneficial ownership'. Blackstone Capital Partners (Singapore) had acquired equity shares of Agile Electric Sub Assembly in two tranches-in August 2013 and October 2013 - and sold all the shares in July 2015.
Thus, besides the significance of TRC, the Blackstone case would also bring to the fore the question of 'beneficial ownership'.
Thanks to the similarities between the two cases, a senior I-T official told ET that the department feels that the Tiger Global verdict could have a bearing on the Blackstone matter. According to Ashish Karundia, founder of the CA firm Ashish Karundia & Co, "The Income-tax Act seeks to tax the real or beneficial owner, and not merely the legal owner of the income, as previously held by Supreme Court in the Kishanchand Lunidasing Bajaj case.
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Source: EconomicTimes
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Andrew Mountbatten-Windsor, who was earlier stripped of his title of Prince, has now moved out of his home in Windsor, UK to the Sandringham Estate in Norfolk. The former prince left Royal Lodge on Monday night and is now staying at Wood Farm on the Sandringham Estate while his permanent home
1 months ago
