| Case ID |
5146c8ca-e764-4f1f-b748-dada552046a0 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Jan 01, 2011 |
| Hearing Date |
Jan 01, 2011 |
| Decision |
The ruling established that the capital gains earned by VNU International B.V. on the transfer of shares are taxable only in the Netherlands according to Article 13(5) of the Tax Treaty between India and the Netherlands. The transfer pricing provisions do not apply as the sale and purchase of shares are between non-resident entities. The applicant is required to file an income tax return in India under Section 139, despite the capital gains not being taxable, to ensure all relevant facts are documented for any future inquiries by the Income-tax Department. |
| Summary |
This case revolves around VNU International B.V., a company incorporated in the Netherlands, which held 100% of the shares in an Indian company, AC Nielsen ONG-MARG Pvt. Ltd. It executed a share purchase agreement to sell these shares to a Swiss company. The core issues addressed included the taxability of capital gains from the transfer of shares under Indian law and the Double Taxation Avoidance Agreement (DTAA) between India and the Netherlands. The ruling emphasized that capital gains would be taxable only in the Netherlands, with no transfer pricing provisions applicable. However, the company is obliged to file a return of income in India to maintain compliance. This ruling is significant for international tax law, particularly for companies dealing with cross-border transactions and taxation issues. It underscores the importance of understanding tax treaties and their implications for foreign entities operating in India. |
| Court |
Authority for Advance Rulings
|
| Entities Involved |
VNU International B.V.,
AC Nielsen ONG-MARG Pvt. Ltd.,
IMS-AG,
ORG-IMS Research Pvt. Ltd.
|
| Judges |
JUSTICE P.K. BALASUBRAMANYAN,
J. KHOSLA,
V.K. SHRIDHAR
|
| Lawyers |
Percy Pardiwalla,
R. Muralidharan,
Bhavin Shah,
Arpit Kabra,
Chandrajit Singh
|
| Petitioners |
VNU International B.V.
|
| Respondents |
|
| Citations |
2011 SLD 2586 = (2011) 334 ITR 56
|
| Other Citations |
Veneburg Group, In re [2007] 289 ITR 464,
Dana Corpn., In re [2010] 321 ITR 178,
Amiantit International Holding Ltd., In re [2010] 322 ITR 678
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
90,
92,
92F,
139
|