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Recently, the Delhi High Court (the High Court) dealt with a writ petition challenging the Advance Ruling in the case of Zaheer Mauritius (the taxpayer). The High Court held that the gains resulting to the taxpayer from sale of equity shares and Compulsorily Convertible Debentures CCDs held in the JV company, are not taxable as ‘interest’ under Section 2(28A) of the Income-tax Act, 1961 and Article 11 of the India-Mauritius tax treaty. The High Court observed that there is sufficient commercial reason for the taxpayer to have routed its investment from Mauritius into the real estate project in India through equity shares and CCDs. Thus, neither the legal nature of CCD’s can be ignored nor the corporate veil between the Indian investee company and the Indian JV company be lifted.