LTCG on Sale of Shares by Mauritius Company Not Liable to Be Taxed in India: ITAT

The Income Tax Appellate Tribunal (ITAT) ruled that long-term capital gains (LTCG) earned from the sale of shares by a Mauritius-based company are not liable to tax in India. The Tribunal emphasized that under the India-Mauritius Double Taxation Avoidance Agreement (DTAA), such gains are not taxable in India if the seller is a resident of Mauritius and meets the criteria for beneficial ownership and tax residency as per the agreement. The ruling upholds the principle that income tax on capital gains should be determined based on the residence of the entity and the provisions of the DTAA, rather than the source of the income.