The India Income Tax Appellate Tribunal (ITAT) delivered its decision on 21 September 2012 in the case of ADIT v. Maersk Line UK Ltd (ITA No. 2150/Kol/2009) that the exercise of dividend distribution by its Indian subsidiary, though tax advantageous to the recipient, cannot be termed as a sham transaction and the receipt of those dividends cannot be re-characterized as sale consideration of shares received in advance. (a) Facts. The Taxpayer (i.e. Maersk Line UK Ltd) had earned long-term capital gains on the sale of shares of its wholly-owned Indian subsidiary to its group company as a part of a reorganization process....