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DCIT, CC-19, New Delhi Versus Smt. Mala Kalsi And Vice-Versa

2017 (12) TMI 127 - ITAT DELHI

Protective additions / assessment - profits of all the overseas companies as mentioned in the assessment order are to be taxed in India on the ground that these overseas company were treating as “Resident” in India - Held that:- It is not out of place to mention that when addition was already made in the hands of the overseas companies on substantive basis treating them as residents in India, there is no justification for the Assessing Officer to make such an addition in the hands of a share hol .....

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without brining on record a concrete and substantial evidence to prove his role. Based on the assessment of Sh. Ajay Kalsi, by virtue of being a 50% share holder in Multi Asset Holdings Ltd., the Assessing Officer made an addition of similar amount in case of the assessee meaning thereby that the Assessing Officer did not assess the income of the assessee based on the details filed in her return u/s 153A, but assessed the income of the overseas companies in her hands without any basis - Decided .....

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st the respective impugned orders passed by the Ld. Commissioner of Income Tax (Appeals)-XXVII, New Delhi relevant to assessment years 2006-07, 2007-08, 2009-10, 2010-11, 2011-12 & 2012-13 respectively. Since the issues involved in these appeals are common and identical, hence, the Appeals and Cross Objections were heard together and are being disposed of by this common order for the sake of convenience, by dealing with Revenue s Appeal being ITA No. 5026/Del/2015 (AY 2006-07). 2. The follow .....

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y Kalsi/Sh. Anil Aggarwal u/s 134(4) have admitted that taxability of these companies lies in India and these companies are resident for the tax purpose u/s 6 of the I.T. Act. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in ignoring that underlying assets and sources of revenue of all the overseas companies in which assessee is shareholder/beneficial owner are the Indian Companies. 3. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as .....

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the revenue has been earned because of underlying assets of the assessee wholly and totally situated in India. 5. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in holding that once an addition on substantive basis was made in the hands of the overseas companies treating them as residents in India u/s 6(3) of the LT. Act, there was no reason of occasion or an issue to assess the same in the hands of the appellant on protective basis. 6. The Ld. Commissioner of .....

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her Cross Objections the grounds are same, except the difference in the figures. 1. On the facts and circumstances of the case and in law, the assessment order passed by the AO is without jurisdiction. 2. That on the facts and circumstances of the case and in law, the initiation of assessment proceedings and issue/ services of notices are not in accordance with the provisions of law and accordingly the assessment order passed on the foundation of such notice(s) is liable to be quashed. 3. On the .....

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e that a search and seizure operation u/s 132 of the Income Tax Act, 1961 was conducted by the Investigation Wing of the department on 22.03.2012 in M/s. Focus Energy Group of cases. The assessee was also covered u/s 132(1) of the Income Tax Act, 1961. In response to notice u/s 153A issued by the Assessing Officer the assessee filed her return of income. While completing the assessment in the case of the assessee, the Assessing Officer did not make any addition on substantive basis. However, add .....

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r to protect the interest of revenue protective addition in respect to the income of the overseas companies for AY 2006-07 of ₹ 371,34,13,346/- was made in the hands of the assessee and income of the assessee was accordingly assessed vide order dated 31.3.2014 passed u/s. 153A/143(3) of the I.T. Act, 1961. Aggrieved with the aforesaid assessment order dated 31.3.2014, assessee filed appeal before the Ld. CIT(A) who vide his impugned order dated 05.05.2015 deleted the protective additions m .....

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enue s appeal, in substance, relate to solitary issue of deletion of protective addition by the Ld. CIT(A). Therefore, the same are being considered together. We find that AO in the assessment order admitted that the entire amount which was added to the income of the assessee on protective basis was already assessed in the hands of the overseas companies on substantive basis . It was further noted that the Assessing Officer did not consider the details filed by the assessee in the course of the .....

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in the hands of three persons i.e. (a) the overseas companies, (b) Sh. Ajay Kalsi and (c) Smt. Mala Kalsi which was unwarranted and unjustified. The additions made in case of the overseas companies u/s 6(3) is not relevant to the case of the assessee as she is only a shareholder, and was not entitled to derive any benefit. During the year under consideration the assessee did not derive any benefit for which she is liable to pay taxes thereon as per the Indian Tax Laws. It is not out of place to .....

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the addition made in case of the overseas companies to the assessment order of Sh. Ajay Kalsi on the ground that he exercised control and management of the affairs of the overseas companies as laid down in section 6(3) of the I.T. Act 1961 without brining on record a concrete and substantial evidence to prove his role. Based on the assessment of Sh. Ajay Kalsi, by virtue of being a 50% share holder in Multi Asset Holdings Ltd., the Assessing Officer made an addition of similar amount in case of .....

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