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2019 (2) TMI 1516 - HC - Income TaxTP adjustment - Adjustment on account of excess money paid to PMP Bakony (AE) for acquiring share - difference between the actual investment and fair market value of the shares - HELD THAT:- The shares which have been purchased by the respondent assess are on capital account. The revenue is seeking to bring the difference between the actual investment and fair market value of the shares (investment) to tax it . This without being able to specify under which substantive provision would income arise. In our view, therefore, the issue arising here stands concluded by the decision of this Court in Vodafone (2014 (10) TMI 278 - BOMBAY HIGH COURT). On principle, if this court has held that Chapter X of the Act is machinery provision and can only be invoked to bring to tax any income arising from an international transaction, then, it is necessary for the revenue to show that income as defined in the Act does arise from the international transaction. The distinction between inbound and outbound investment is a distinction which does not take the case of revenue any further, as the Legislature has made no such distinction while providing for determination of any income on adjustments to arrive at ALP arising from an international transaction. No provision of the Act has been shown to us, which would allow the Revenue to tax a potential income in the present facts. Tribunal was correct in deleting the adjustment on account of excess money paid to PMP Bakony (AE) for acquiring share - decided against revenue
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