The Madras High Court (Court) recently ruled in favour of the Taxpayer (M/s WABCO India Limited v The Deputy Commissioner of Income-tax, W.A.No. 884 of 2018 and C.M.P Nos. 8825 and 7726 of 2018) holding that the Taxpayer could not be taxed in India when it had no role to play in a share transfer that took place outside India.
The Taxpayer is an Indian listed company, engaged in the business of designing, manufacturing and marketing conventional braking products and systems. Being a listed company, 75% of its shareholding was held by Clayton Dewandre Holdings Ltd. (Seller), a Netherlands based entity and the remainder 25% is held by public shareholders at large.