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2014 (11) TMI 1052 - HC - Income TaxTransfer pricing adjustment - amounts received on issue of shares - whether issue of shares at a premium by the Petitioner to its non-resident holding company gave rise to any income from an admitted International Transaction - applicability of provisions of chapter X - Held that:- As in the case of M/s Vodafone India Services Private Limited [2014 (10) TMI 278 - BOMBAY HIGH COURT ] held that the amounts received on issue of shares is a capital account transaction not separately brought within the definition of 'income' as per the provisions of section 2(24) as well as sections 4 & 5 of the Act. Therefore, such capital account transaction not falling within a statutory exception cannot be brought to tax. Even income arising from international Transaction between AE must satisfy the test of income under the Act and must find its home in one of the above heads i.e. charging provisions. There is no charging section in chapter X of the act. Only if there is income which is chargeable to tax under the normal provisions of the act, then alone chapter X of the act could be invoked. Further, since there is no income arising from the transaction of issue of shares, the provisions of chapter X would not apply. Accordingly, we set aside the orders of TPO dated 30 January 2013, the Draft Assessment order dated 26 March 2014 and of DRP dated 1 December 2013 to the extent they seek to make additions on account of issue of equity shares and debentures to its AE and the shortfall in receipt thereof being considered as deemed loan and deemed interest thereon being sought to be brought to tax. - Decided in favour of assessee
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