23 February 2008
In this case when Bonds are exchanged into shares the same is not taxable in the hands of the non resident is clarified but whether the same could be taxable in the hands of the issuer since the shares are his assets and of other group company. Logically no but a view could be taken and what would be the reasoon if they are taxable and what would be the reason of noit taxing the same
25 February 2008
The assumption that the shares are his assets may require clarification. In fact although the scheme says that the issuing company must hold shares being offered, it is not clear whether the same shares will have to be exchanged or by fresh issue of shares in the offered company which utilises the funds raised through the FCEB.
In any case clause 9 clarifies that no capital gains shall arise in India on account of the scheme.
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