Case nº A.A.R. No. 956 of 2010 of Authority for Advance Rulings, August 22, 2012 (case Credit Suisse (International) Holding AG Bahnhofstrasse 17, 6300 Zug Switzerland, Address in India S.R. Batliboi & Co., 6th floor, Express Towers, Nariman Point, Mumbai -400021 Vs Director of Income-tax (International Taxation))

PresidentMr. P.K. Balasubramanyan, (Chairman)
Resolution DateAugust 22, 2012


Mr. P.K. Balasubramanyan, (Chairman)

  1. The applicant is a company incorporated under the laws of Switzerland and is a fully owned subsidiary of another company referred to as 'company C' hereinafter, incorporated in Switzerland. The applicant had set up a wholly owned subsidiary in India under the Indian Companies Act, 1956. For convenience, the Indian company is henceafter referred to as 'I Co.' The applicant and its nominees together hold all the shares of I Co. The main business of the applicant is to acquire, hold, administer and have disposition over financial participation in other companies. 'Company C' and the applicant intend to merge into a single legal entity by means of a merger by absorption pursuant to Article 3 paragraph 1a of the Swiss Merger Act. Thereby, all the assets and liabilities of the applicant would be assumed by 'company C' and the applicant would be dissolved without liquidation. No consideration would pass to the applicant consequent on the merger in view of Article 8 of the Swiss Merger Act.

  2. The applicant approached the Authority with this application under section 245Q of the Income-tax Act seeking advance rulings on the questions raised by it in the context of the above merger. After hearing both sides, while reserving the question for consideration whether any scheme for avoidance of tax was involved, this Authority allowed the application under section 245R(2) of the Act to render Rulings on the following questions:

  3. Whether any capital gains under section 45 of the Act arises to the applicant as a result of vesting of shares of Credit Suisse Services (India) Private Limited (I Co.) held by the applicant in Credit Suisse AG on its amalgamation with Credit Suisse AG, the parent company?

  4. Whether the vesting of shares of I Co. held by the applicant in Credit Suisse AG, pursuant to a scheme of amalgamation is exempt from capital gains tax under section 47(via) of the Act?

  5. If answer to question 1 is in the affirmative and answer to question 2 is in the negative, whether the rate of tax applicable to the applicant is 20% as per the provisions of section 112(1) of the Act after giving effect to the first proviso to section 48 of the Act?

  6. If answer to question 1 is in the affirmative and answer 2 is in the negative, whether there is any requirement on Credit Suisse AG to withhold taxes in accordance with the provisions of section 195 of the Act?

  7. If answer to question 1 is in the negative...

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