1. Pan-Asia iGate Solutions, Mauritius has filed the present application u/s 245Q(1) of the Income-tax Act, 1961 (in short "Act")seeking ruling on the questions:

"(1) Whether on the stated facts and law, the tax is required to be withheld by the Applicant under section 195 of the Income-tax Act, 1961 on purchase of 1,82,55,396 equity shares of Patni Computer Systems Ltd (hereinafter referred to as 'Patni'), being listed security, from iSolutions, Inc. USA at 10.56 per cent (inclusive of surcharge and cess) of the amount of long term capital gains arising to iSolutions, Inc. as per the proviso to section 112(1) of the Income-tax Act, 1961?

(2) Whether on the stated facts and in law, the tax is required to be withheld by the Applicant under section 195 of the Income-tax Act, 1961 on purchase by it of 1,59,20,264 shares (included in 1,82,55,396 shares referred to above) issued by Patni as bonus equity shares, being listed security, from iSolutions, Inc. USA as 10.56 per cent (inclusive of surcharge and cess) of the amount of long term capital gains arising to iSolutions, Inc. as per the proviso to section 112(1) of the Income-tax Act, 1961?"

2. Background facts highlighted for seeking ruling are as follows:

The Applicant is a Mauritius company, having its registered office at International Financial Services Limited, IFS Court, Twenty Eight, Cybercity, Ebene, Mauritius incorporated on 17 December 2010, and registered under the Mauritius Companies Act, 2001. The control and management of the affairs of the Applicant is situated outside India and therefore, qualifies as a non-resident company under the provisions of the Income-tax Act, 1961 ('the Act').

The Applicant passed a board resolution at a Board Meeting held on 7 January 2011 proposing to purchase 1,82,55,396 (One crore eighty two lacs fifty five thousand three hundred ninety six) equity shares of Patni Computer Systems Ltd. ('Patni') from iSolutions, Inc. a US based company ('Seller or 'iSolutions').

Patni is an Indian company, incorporated in the year 1978, and is registered under the Companies Act, 1956 having its registered office at S-1A, Irani Market Compound, Yerawada, Pune, Maharashtra. It is engaged in the business of providing information technology services and business solutions. Patni is listed on the Bombay Stock Exchange Limited, National Stock Exchange of India Limited and New York Stock Exchange.

iSolutions, incorporated on 1st October, 1999, and registered under the Company Laws of USA has its office at 1105, North Market Street, Suite 1300, Wilimington DE 19801.

iSolutions purchased the original equity shares of Patni in foreign currency. The bank statements of Mr.Anirudh Patni and Mrs.Poonam Patni (original share holders/promoters from whom iSolutions purchased the shares) reflect the remittance by iSolutions to Mr.Anirudh Patni and Mrs.Poonam Patni of USD 23,99,994 and 22,99,994 respectively on April 24, 2000.

iSolutions passed a resolution on 28 December 2010 wherein its Board of Directors proposed to sell upto 1,82,55,396 equity shares (which include both originally acquired equity shares purchased in May, 2000 as well as bonus shares acquired upto August, 2003) of Patni (as it has now transpired) to the applicant. iSolutions held the aforesaid 1,82,55,396 shares of Patni for a period of more than 12 months for affecting such sale, iSolutions has entered into a Share Purchase Agreement dated January 10, 2011.

The applicant is now approaching this Hon'ble Authority to determine the rate at which tax ought to have been deducted under section 195 of the Act from the payment made to iSolutions for the purchase of equity shares of Patni.

3. The rival submissions need not detain us, in view of the fact that the decision of this Authority in Cairn UK Holdings Ltd., In re [2011] 337 ITR 131/201 Taxman 111 was set aside by the Hon'ble Delhi High in Cairn UK Holdings Ltd. v. DIT [2013] 359 ITR 268/[2014