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2021 (7) TMI 1018 - ITAT MUMBAITaxability of income received from re-insurance business in India - whether SRSIPL constitutes a PE of the assessee in India so as to bring the business profit of the assessee to tax in India in terms of India-Switzerland DTAA? - HELD THAT:- The issue, whether SRSIPL can be considered as a PE of the assessee in India has arisen time and again before the Tribunal and the Tribunal has consistently decided in favour of the assessee. In fact, the impugned direction of the learned DRP would reveal that though learned DRP was conscious of the fact that the Tribunal has decided the issue in favour of the assessee in assessment year 2010-11; however, since the revenue has filed an appeal against the decision of the Tribunal, learned DRP decided the issue against the assessee just for the sake of keeping it alive. We decide the issue in favour of the assessee by holding that since SRSIPL is not a PE of the assessee, the profits earned from re5 insurance business cannot be brought to tax in India in terms of Article 7 of India Switzerland DTAA. Accordingly, addition is deleted. These grounds are allowed Disallowance of long-term capital loss arising from sale of shares - HELD THAT:- Undisputedly, after applying the computational provisions of sections 48 and 49 of the Act to the sale transaction of shares of TTK, long term capital loss arises. Therefore, the assessee is entitled to claim such long term capital loss. As regards the allegation of the assessing officer that assessee had not valued the shares under rule 11UA, we fully agree with the submissions of assessee that rule 11UA is application for valuation of assets specified under section 56(2)(vii), 56(2)(viia) and 56(2)(viid). Therefore, rule 11UA cannot be applied for determining the value of unlisted equity shares for any purpose other than section 56(2) of the Act. In any case of the matter, the assessee, on its part, has furnished valuation report of an expert determining the value of shares. Whereas, no such valuation has been done by the assessing officer to counter assessee’s valuation. Similarly, the allegation of the assessing officer that the promoter of Vidal Healthcare Services Ltd, Shri Girish Rao was linked to the assessee is wholly irrelevant. Undisputedly, Vidal Healthcare Services Ltd is an independent corporate entity having its own separate identity. It is no way related to the assessee. Therefore, even assuming that Shri Girish Rao at some point of time was an employee of the assessee or somehow related to TTK would not be enough to conclude that the assessee and Vidal Healthcare Services Ltd are related parties. As regards the allegation of the assessing officer that the assessee has invested in TTK at a premium and thereafter sold the shares at a loss to benefit Warren Buffet’s Hathaway Berkshire, in our view, is totally irrelevant for deciding the issue in dispute. Rather, these allegations vindicate that the assessing officer has allowed his decision making process to be clouded by irrelevant material, presumption and surmises. In view of the aforesaid, we hold that the assessee having incurred long term capital loss in course of a genuine transaction relating to sale of shares, is eligible to claim set off and carry forward of such loss.
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