Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (12) TMI 1552 - ITAT MUMBAI

2015 (12) TMI 1552 - ITAT MUMBAI - TMI - Addition on account of notional interest for Share Application Money paid to AE - TPA - Held that:- TPO has considered this transaction as a loan transaction by brushing aside the submissions of the learned AR of the assessee that this money was given as share application money and that too without giving any finding or indication any basis to say that this is a loan transaction. - TPO has not brought on record anything to show that any unrelated shar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld that no ALP adjustment is to be made in the present case, the dispute raised by the revenue that such adjustment should be as per domestic PLR as against LIBOR rate approved by CIT (A) does not survive and therefore, the appeal of the revenue is liable to be rejected - Decided in favour of assessee. - I.T.A. No. 7026 & 7025/Mum/2013, I.T.A. No. 7608/Mum/2013 - Dated:- 4-12-2015 - SHRI A.K. GARODIA, AM and SHRI AMIT SHUKLA, J.M. Assessee by : Shri Vijay Mehta Revenue by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onal interest for Share Application Money paid to AE. 1. The learned CIT (A) erred in law and on facts in upholding addition/adjustment to income being ALP/ notional interest on advance share application money given, even though there is no income from AE to which transfer pricing provisions can be applied. The reasons given by him for doing so are wrong , contrary to the facts of the case and against the provisions of law. 2. The learned CIT (A) erred in law and on facts i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

: Addition on account of notional interest for Share Application Money paid to AE. 1. The learned CIT (A) erred in law and on facts in upholding addition/adjustment to income being ALP/ notional interest on advance share application money given, even though there is no income from AE to which transfer pricing provisions can be applied. The reasons given by him for doing so are wrong, contrary to the facts of the case and against the provisions of law. 2. The learned CIT (A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vance share application money treated as interest free loan as held in various decisions. The reasons given by him for doing so are wrong, contrary to the facts of the case and against the provisions of law. 4. The appellant craves the leave to add, amend or alter all or any of the grounds of Appeal. 4. The grounds raised by the revenue in A.Y. 2007 - 08 are as under: 1. The learned CIT (A) erred on facts and in law in deleting he addition of ₹ 92,78,558/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he fact that domestic prime lending rate adopted by the TPO/AO is most appropriate in this case. 5. It was submitted by the learned AR of the assessee that in the present case, the issue involved is squarely covered in favour of the assessee by the following judicial Pronouncements:- a. DCIT vs. Cadila Healthcare Ltd., 39 Taxman.com 51, P. B. pages 31 to 36. b. Bharti Airtel limited vs. Addl. CIT in ITA No. 5816/Del/2012 dated 11.03.2014, P. B. pages 37 to 45 (R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vs. Vikas Oberoi, 64 SOT 101 (Mum). P. B. pages 75 to 78. 6. He also submitted that in the case of Bharti Airtel limited vs. Addl. CIT (Supra), the tribunal has duly considered and distinguished both tribunal orders on which, reliance is placed by the A.O. and the facts of the present case are similar to the facts in the case of Bharti Airtel limited vs. Addl. CIT (Supra). He also submitted that eventually, the shares were allotted as per share script copy available on page 12 of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

than 3 and half years from the date of agreement on 01.08.2006 and therefore, this tribunal order should be followed in the facts of the present case. 8. In the rejoinder, it was submitted by the learned AR of the assessee that in Para 18 of that tribunal order relied upon by the learned DR, it is noted that the assessee has failed to bring on record any evidence regarding the terms and conditions of such share application money and allotment of shares but in the present case, the agr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me is distinguishable on facts. 9. We have considered the rival submissions. First we examine the applicability of the tribunal order rendered in the case of M/s PMP Auto Components (P) Ltd. vs. DCIT (Supra). We find that as per the facts of that case, the amount was given to AE as loan without charging any interest and the disputes raised before the tribunal were two only. First dispute was regarding interest rate adopted by the TPO by ignoring LIBOR rate and the second dispute was T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Bharti Airtel limited vs. Addl. CIT (Supra). In that case, the money was advanced to AE foreign subsidiaries as share application money as in the present case and shares were allotted after 13 to 16 months as against 42 months in the present case. In Para 47 of this tribunal order, the tribunal has considered this argument also that there is delay in allotment of shares. The tribunal stated that since the TPO has not brought on record anything to show that any unrelated share applicant was t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

submissions of the assessee in Para 4.2 of his order where the assessee submitted that the amounts were provided as equity/quasi equity and subsequently converted into equity shares. Thereafter in very next Para i.e. Para 4.3 of his order, the TPO starts with this observation that the concern of the assessee that conversion of loan into equity precludes the TPO to determine the arm s length interest on the above interest free loan is covered in favour of the revenue by a tribunal order rendered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version