TMI Blog2024 (1) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... se has been reopened just because of assessee made remittances which is from the sale of investments made by the assessee. Though the merits of the matter is relevant at the time of reopening, the Assessing Officer at the stage of reopening is required to form only a prima facie believe are satisfaction that income chargeable to tax has escapement assessment. In this case we don t find any such prima facie satisfaction from the reasons recorded. Hence it can be concluded that there was no escapement of income during the year and hence, the notice issued u/s. 148 is considered to be void ab initio and consequently the assessment is treated as nullity. Appeal of the assessee is allowed. - Shri Kul Bharat, Judicial Member And Dr. B. R. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Without prejudice to the above grounds, on the facts and in the circumstances of the case and in law, the assessing officer has grossly erred in holding that the entire investment of INR 67,73,52,950 made by the Appellant towards subscribing to Compulsorily Convertible Debentures in Skeiron Renewable Energy Private Limited be treated as undisclosed business income earned in India and should be taxed at the rate of 40% as per the provisions of the Act. 6. That on the facts and in the circumstances of the case, the assessing officer erred in alleging that It is understood that the entire investment has been made from income earned/accrued in India during the year under consideration purely on conjecture and surmises, without b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporation has made investments in various countries such as India, China, Mauritius, Singapore, Hong Kong etc. 4. During FY 2016-17, the Company has invested an aggregate amount of INR 96,55,88,240 for subscribing to 2,88,23.529 equity shares and 6,77.35.295 CCDs of Skeiron Renewable Energy Private Limited ('Skeiron) (a private limited company incorporated in India), at a price of INR 10 per equity share and CCD. Considering that the Assessee is a tax resident of Mauritius and holds a valid TRC issued by the MRA and Form 10F for FY 2016-17, it is eligible to claim benefits under the India-Mauritius DTAA to the extent it is more beneficial than the provisions of the Act. Accordingly, the capital gains earned by the Assessee for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.No Transaction Amount (Rs./-) Category 1 28,82,35,290 Remittance to a non-resident or to a foreign company 3. It is pertinent to mention that though the assessee has made large transactions, the assessee has chosen not to file return of its income for the relevant year. Therefore, it appears that the assessee is carrying on some activity which has resulted in generation of income, but the income has escaped assessment as no ITR has been filed by the assessee. 4 Thus, the above facts indicate that the assessee has not filed return of income for the year under consideration. As per the provisions of Section, 139, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt Ltd Vs ACIT(2007) 291 TTR 500/161 Taxman 316 (SC), Hon'ble Supreme Court has held that: All that is required for the Revenue to assume valid jurisdiction u/s 148 is the existence of cogent material that would lead a person of normal prudence, acting reasonably, to an honest belief as to the escapement of income from assessment. It is also pertinent to mention that on similar lines, in the case of CIT v. Nova Promoters Finlease (P) Lid (ITA NO. 342 of 2011), the Hon'ble Delhi High Court, which is the jurisdictional High Court, has held as below: We are aware of the legal position that at the stage of issuing the notice under Section 148, the merits of the matter are not relevant and the Assessing Officer at that st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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