In 2016, Zee and Sony signed a business purchase agreement after Zee’s Ten Sports was sold to Sony via Taj TV – a wholly-owned subsidiary of Zee in Mauritius
The income tax department will reportedly move the Bombay High Court against a ruling that prevents capital gains tax on the sale of Ten Sports to SonyPictures Network by a Mauritian entity linked to Zee Entertainment.
The sale amount is around Rs 1,800 crore and dates back seven years, said a news report.
In 2016, Zee and Sony signed a business purchase agreement after Zee’s Ten Sports was sold to Sony via Taj TV – a wholly-owned subsidiary of Zee in Mauritius.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) ruled that the sale of the sports channel is not taxable in India. Taj TV has no permanent establishment, entitling it to avail the treaty benefit under the Double Taxation Avoidance Agreement, according to the report.
It added that the gains from the alienation of property would be taxable only in the state of residence of the alienator. In this case, it is Mauritius.
Gains close to Rs 1,7980 crore on the sale of the property is not chargeable to tax in India, said the ITAT.
