CA Final · Direct Tax Laws & International Taxation · Provisions to Counteract Unethical Tax Practices
Orbit Holdings Pvt Ltd is the Indian concern. Its structure: Alpha Ltd (Singapore) directly holds the controlling interest in it; Alpha is controlled by Beta Ltd (Mauritius); Beta is controlled by Gamma Inc (USA), which is not controlled by any other entity. Under the definitions in Rule 235(8), which classification is correct?
Alpha is the immediate holding company because it directly holds the controlling interest in the Indian concern. Beta is intermediate because it controls Alpha yet is itself controlled by Gamma. Gamma is the ultimate holding company because it is not controlled by any other entity.
- AAlpha is the immediate holding company, Beta the intermediate holding company and Gamma the ultimate holding companyCorrect
- BGamma is the immediate holding company, Beta the intermediate holding company and Alpha the ultimate holding company
- CAlpha is both immediate and ultimate holding company
- DBeta is the immediate holding company, Alpha the intermediate holding company and Gamma the ultimate holding company
Explanation
Immediate holding entity directly maintains controlling interest in the Indian concern: Alpha. Intermediate holding entity has controlling interest in another entity and is itself controlled by another: Beta, which controls Alpha and is controlled by Gamma. Ultimate holding entity has ultimate control and is not controlled by anyone: Gamma. The reversed or mixed options misapply these definitions.
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