Share this article
Share this article
DUBAI, UAE, June 14, 2021 /PRNewswire/ According to the recent McKinsey Global Survey of executives, companies have accelerated the digitization of their customer and supply-chain interactions and their internal operations by three to four years. Additionally, the share of digital or digitally enabled products in their portfolios has accelerated by seven years.
Hitachi Vantara and Redington Gulf
As a consequence, data storage has become a key component for businesses around the world. One of the current trends in the data storage market is that it is widely popular and in-demand due to the rising storage capacity in terms of Terabyte and Petabyte of Big Data generated by organisations.
Shycocan Corporation addresses the critical need to implement safe workplaces in the UAE at its inaugural partner event held at the Doubt Tree by Hilton.
A taxpayer s intentions at the time of a transaction will significantly influence a court s opinion
The Madras High Court delivered a judgment on tax avoidance in the case of
Redington India Limited (company) on December 10 2020. The company had transferred its entire holding in an overseas company to another newly incorporated step-down overseas subsidiary without consideration. It claimed the transaction as a gift and, thus, non-taxable under domestic tax law.
The case before the Madras High Court mainly involved whether the transaction was a valid gift as per domestic laws, and hence out of the scope of capital gains tax, and the applicability of transfer pricing laws to the transaction.
No Benefits To Foreign Firms Trying To Dodge Indian Tax Laws, Rules Madras High Court
by M R Subramani - Dec 23, 2020 10:23 AM
Madras High Court (Picture Credits- Facebook/Readinfo)
Snapshot
Now, any transfer of shares by companies registered in India to a step-down subsidiary â a unit of the subsidiary â cannot be termed a valid gift.
The Madras High Court has ruled that the Union government need not provide any tax benefit to foreign companies investing in India if the objective of the investment is to dodge domestic tax laws or such attempts are made.
A Madras High Court bench comprising Justices TS Sivagnanam and V Bhavani Subbaroyan has also ruled that any transfer of shares by companies registered in India to a step-down subsidiary (a unit of the subsidiary) cannot be termed a valid gift.
The Madras High Court has held that transfer of shares by Redington India to its step down subsidiary cannot be categorized as valid gift and is not eligible for tax exemption.
The court observed that the incorporation of the company in Mauritius and Cayman Island just before the transfer of shares is undoubtedly a means to avoid taxation in India and the said two companies have been used as conduits to avoid income tax.
Redington India (RI) had set up a new wholly owned subsidiary in Mauritius in July, 2008, viz., RM with an initial investment of USD 25,000 (Rs.10.78 Lakhs). RM, thereafter set up a wholly owned subsidiary RC in Cayman Island, which started its operation from 14.07.2008. The assessee (RI) transferred without consideration its entire shareholding in Redington Gulf FZE (RG) to RC on 13.11.2008 pursuant to which, RG become a step down subsidiary of RM. The assessing officer held that the voluntary transfer of shares of RG by the assessee without consideration to RC,