Foreign Investments

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jayashree (Querist)
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23 April 2009 An Indian Public Ltd Company invests in 51% shares of a foreign Co.,.For this consideration is paid in the form of cash rs 2.4 million $ and shares of Indian Company valued at Rs 400 per share.The Indian Company has also accepted to give a guaranteed loan of Rs 3 million dollars for the Development of business of Foreign Co., The transfer of shares are complete, but the Indian Co., has failed to make the payment of Rs. 3 million.So the Foreign Company wants to cancel the contract and get their shares back.What will be the Tax Implication? Will Capital gains arise if the foreign Co, pays some consideration to get back their shares? Will the Disinvestment by Indian Company treated as Buy Back?

taxindiaconnect

taxindiaconnect (Expert)
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24 April 2009 This is an interesting qustion. Kindly elaborate further to understand the query and form a view. if you wish you can write to me in my personal mail box on CA club India.