Treaty between India and Mauritius – Indian decision on place of effective management of Mauritian company and taxability of capital gains

The Income Tax Appellate Tribunal (ITAT) delivered a ruling dated 20 July 2007 in the case of Saraswati Holding Corporation Inc., Mauritius v. Deputy Director of Income Tax (111 TTJ 334) on whether a Mauritian entity's place of effective management was situated in India so as to be regarded as a resident of India for tax purposes, and whether capital gains earned by it were taxable in India.

(a) Facts. The Taxpayer (i.e. Saraswati Holding Corporation Inc., Mauri…