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2023 (1) TMI 420 - HC - Income TaxReopening of assessment - TDS u/s 195 - payments to the foreign entities without deducting tax - HELD THAT:- Both parties are ad idem that the judgment rendered by the coordinate bench of this Court titled Vedanta Ltd. (Successor of Sterlite Industries (India) Limited) [2019 (8) TMI 1067 - DELHI HIGH COURT] covers the said issue against the respondent. To be noted, the said judgment concerned Assessment Year (AY) 2010-2011, while the instant matter relates to AY 2011-2012. In these circumstances, we have queried the learned counsel for the parties, as to whether the aforementioned judgment was carried in appeal to the Supreme Court. Learned counsel for the parties say, that the judgment remains undisturbed. Write off interest and other liabilities - assessee entered into a One Time Settlement (OTS) with the Vijaya Bank, and in that process, an amount equivalent and interest accrued thereof, was written-off - HELD THAT:- As what emerges from a perusal of the Tribunal’s judgment that the claim by Vijaya Bank for recovery against the petitioner [i.e., defendant no.1] in respect of the indemnity bond furnished was dismissed. There was, therefore, no loan, as alleged, taken by petitioner and thus, quite logically, no OTS could have been arrived at between the petitioner and Vijaya Bank. AO, in our view, also went wrong in observing that the petitioner may have claimed interest against the loan supposedly received by it in earlier years. Petitioner had only furnished an indemnity bond for possible misuse of dividend warrants. Dividends, as is well known, involve appropriation of profits and therefore, the petitioner could not have possibly claimed deduction against its profits. Given these circumstances, we are of the view, that there was no application of mind on behalf of the assessing officer in issuing the impugned notice even as regards the second issue. As noticed above, as far as the first issue is concerned, it is covered in favour of the petitioner i.e., the assessee, by the judgment referred to above, passed by the coordinate Bench of this Court. We are in agreement with the petitioner’s stand, that the impugned notice issued under Section 148 of the Act, cannot be sustained.
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