TMI Blog2020 (6) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... t s International Transactional of Share Capital subscription into its Associated Enterprise (AE) - re-characterizing a share subscription transaction as a transaction of advancing of loan and holding the appellant s international transaction is not at arms length by the Revenue - HELD THAT:- So far as the re-characterization of the transaction is concerned the case of the assessee is this that after 240 days, the share was allotted instead of 180 days as stipulated by the RBI Circular but the AO treated the entire transaction as on loans. The assessee joins issue here to this effect that the TPO cannot question the commercial expediency of the assessee entered into such transaction, neither cannot disregard the appellant transaction and substitute the same without any material of exceptional circumstances pointing out that the assessee had tried to conceal the real transaction or the transaction in question was sham. In this regard we have carefully considered the judgment passed in the matter of PCIT vs. M/s. Sterling Oil Resources Ltd. [ 2019 (7) TMI 390 - BOMBAY HIGH COURT] wherein it has been pleased to hold that the TPO cannot question the commercial expedience of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was actual delay from the due date prescribed by the Act. A chart containing such details of payments has also been filed by the assessee before us from which it appears that an amount of ₹ 31,018/- has been paid late i.e. on 14.08.2013 when the due date was 20.07.2013. The proofs of payments made towards employees contribution of PF which has claimed to have been made within due date prescribed by PF Act i.e. 20th of the next month are also appearing from page nos. 1 to 12 of the paper book filed before us. In that view of the matter, we find force in the submissions made by the Learned counsel and therefore, we set aside the issue to the Learned AO to take into consideration the entire details filed by the assessee regarding payment made towards employees contribution to PF and ESIC and to give relief to that particular amount which has been paid in time as prescribed in the concerned acts taking into consideration the judgment passed by the Hon ble Jurisdictional High Court in the case of CIT vs. GSRTC [2014] 366 ITR 170 (Guj.). Hence, first ground of assessee s appeal is partly allowed for statistical purposes. 4. The next ground relates to confirmation of the up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the transactions are found to be substantially at variance with the stated form. In the present case, there cannot even asuggestion to hold that this is a bogus transaction since the subscribed share capital has indeed been allotted to the appellant. In the identical set of facts, the appellant urged upon the judgment passed by the Hon ble Bombay High Court in the matter of PCIT vs. M/s. Sterling Oil Resources Ltd.ITA No. 341 of 2017 order dated 1st July, 2019. 6. However, an alternative argument has also been advanced by the Ld. AR to this effect that in the event the Tribunal finds it debt but no equity, adjustment could be confined only to 80 days in view of the particular fact the share was allotted after 260 days and not within 180 days being the permissible limit as per the RBI Master Circular No. 15/2014-15 dated 01.07.2014. In this regard, he also relied upon the judgment passed by the Ld. CIT(A) in matter for Torrent Pharmaceuticals Ltd. for A.Y. 2012-13 dated 23.03.2018. A copy whereof has also been handed over to us. 7. The Ld. DR relied upon the order passed by the Ld. CIT(A). 8. We have heard the parties and perused the relevant materials available on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on notional basis. The Tribunal by the impugned judgment, deleted the addition observing that the TPO had re- characterised the transaction of subscription of shares into advancing of unsecured loans. The Tribunal did not accept such conclusion, inter-alia on the grounds that the TPO cannot disregard the apparent transaction and substitute the same without any material of exceptional circumstances pointing out that the assessee had tried to conceal the real transaction or that the transaction in question was sham. The Tribunal observed that the TPO cannot question the commercial expediency of the assessee entered into such transaction. 3. We are broadly in agreement with the view of the Tribunal. The facts on record would suggest that the assessee had entered into a transaction of purchase and sale of shares of an AE. Nothing is brought on record by the Revenue to suggest that the transaction was sham. In absence of any material on record, the TPO could not have treated such transaction as a loan and charged interest thereon on notional basis. No question of law arises. 6. Income Tax Appeal No.1583/2016 has been filed by the assessee. It is a case in which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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