The High Court issued a decision on 30 August 2012 in the case of DIT v. Besix Kier Dabhol SA (ITA No.776 OF 2011) that, in absence of thin capitalisation rules, there can be no disallowance of interest expense under the Indian Income Tax Act 1961 (ITA) despite a high debt-equity ratio.
(a) Facts. The Taxpayer (i.e. Besix Kier Dabhol SA) was a company incorporated in Belgium and i…