Appeal Details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 4234 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-05-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
G
Assessment Year
2014-2015
Appeal Filed On
22-11-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SH. AMIT SHUKLA, JUDICIAL MEMBER ITA NO.7397/DEL/2018 [ASSESSMENT YEAR: 2014-15] SILVER BELLA HOLDIN GS LIMITED, C/O-DELOITTE HASKINS & SELLS LLP, INDIABULLS FINANCE CENTRE, TOWER-3, 28 TH FLOOR, SENAPATI BAPAT MARG, ELPHINSTONE ROAD (W), MUMBAI-400013 THE ASSISTANT COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE-3(1)(2), ROOM NO.418, E-2 BLOCK, CIVIC CENTRE, J. L. NEHRU MARG, NEW DELHI-110002 PAN - AAQCS7326E APPELLANT RESPONDENT APPELLANT BY SH KETAN VED - CA RESPONDENT BY SH. PRABHA KANT, CIT - DR DATE OF HEARING 12.05.2021 DATE OF PRONOUNCEMENT 19 .05.2021 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE O RDER DATED 07.09.2018 FRAMED U/S 143(3) R.W.S. 144C(13) OF THE ACT FOR AS SESSMENT YEAR 2014-15. 2. THE FIRST CHALLENGE IS THAT THE ASSESSMENT ORDER IS BARRED BY LIMITATION AND THE SECOND CHALLENGE IS IN RESPECT OF ACTION OF THE ASS ESSING OFFICER STATING THAT THE 2 ITA NO.7397/DEL/2018 ASSESSEE IS NOT THE BENEFICIAL OWNER OF INTEREST IN COME EARNED BY IT AND IS THEREFORE NOT ELIGIBLE TO CLAIM THE BENEFICIAL TAX RATE OF 10% IN TERMS OF ARTICLE 11 OF THE INDIA-CYPRUS DOUBLE TAX AVOIDANCE AGREEMENT (IN SHORT DTAA). 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE HAS FILED ITS RETURN OF INCOME ON 27.11.2014 DECLARING TOTAL INCOME OF RS.2 4,82,50,000/-. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS ONLY EARNED INTEREST ON CCDS FROM NTPL. THE ASSESS ING OFFICER WAS OF THE OPINION THAT THE ASSESSEE COMPANY HAS MADE ONLY ONE INVESTMENT S INCE IT IS INCORPORATED DESPITE BEING AN INVESTMENT COMPANY. THE ASSESSEE WAS ASKED TO FILE DETAILS JUSTIFYING THAT THE PRINCIPAL PURPOSE OF THE COMPANY, CONDUCT OF ITS BU SINESS AND THE ACQUISITION OR MAINTENANCE BY IT OF THE SHAREHOLDING OR THE OTHER PROPERTY FROM WHICH INCOME IN QUESTION HAS BEEN DERIVED OR MOTIVATED BY SOUND BUS INESS PRINCIPALS/REASONS AND THEY DO NOT HAVE A PRIMARY PURPOSE OF OBTAINING TREATY B ENEFITS. THE ASSESSEE FILED NECESSARY DETAILS WITH DETAILED SUBMISSIONS. AFTER CONSIDERI NG THE DETAILS AND THE SUBMISSION, THE ASSESSING OFFICER ISSUED A SHOW CAUSE ASKING THE AS SESSEE WHY THE TREATY BENEFIT SHOULD NOT BE DISALLOWED. THE ASSESSEE FILED DETAIL ED REPLY IN SUPPORT OF ITS CLAIM OF TREATY BENEFIT. THE REPLIES OF THE ASSESSEE DO NOT FIND FAVOUR WITH THE ASSESSING OFFICER WHO DISALLOWED THE TREATY BENEFIT AND ASSESSED THE INCOME @20%. 4. THE ASSESSEE RAISED OBJECTIONS BEFORE THE DRP BU T WITHOUT ANY SUCCESS. 5. BEFORE US, THE COUNSEL FOR THE ASSESSEE VEHEMENT LY STATED THAT THE ASSESSMENT ORDER DATED 07.09.2018 IS BARRED BY LIMITATION IN A S MUCH AS THERE WAS NO NEED TO FRAME 3 ITA NO.7397/DEL/2018 A DRAFT ASSESSMENT ORDER AS PER PROVISIONS OF SECTI ON 144C(13) OF THE ACT. THE COUNSEL RELIED UPON VARIOUS JUDGMENTS OF THE CO-ORDINATE BE NCHES. 6. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE LO WER AUTHORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER PROPOSED THAT THE INTEREST INCOME IS TO BE TAXED @ 20% U/S 115A(1)(A)(II) OF THE ACT AS UNDER:- PARTICULARS AMOUNT (IN RS.) AS PER RETURNED INCOME INTEREST INCOME EARNED BY THE ASSESSEE 24,82,52,000 TAX AT BENEFICIAL TAX RATE AS PER DTAA (10%) 2,48,25,000 AS PER DRAFT ASSESSMENT ORDER INTEREST INCOME EARNED BY THE ASSESSEE 21,15,22,610 TAX U/S 115A(1)(A)(II) @ 20% 4,23,04,522 DECREASE IN REF UND ON DISALLOWANCE OF DTAA BENEFIT 1,74,79,525 8. PROVISION OF SECTION 144C(1) READ AS UNDER:- 144C. (1) THE ASSESSING OFFICER SHALL, NOTWITHSTAN DING ANYTHING TO THE CONTRARY CONTAINED IN THIS ACT, IN THE FIRST INSTAN CE, FORWARD A DRAFT OF THE PROPOSED ORDER OF ASSESSMENT (HEREAFTER IN THIS SEC TION REFERRED TO AS THE DRAFT ORDER) TO THE ELIGIBLE ASSESSEE IF HE PRO POSES TO MAKE, ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY VARIATION [ 84A WORDS IN THE INCOME OR LOSS RETURNED OMITTED BY THE FINANCE ACT , 2020, W.E.F. 01.04.2020] WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. 9. A PERUSAL OF THE AFORESAID PROVISIONS SHOWS THAT THE ASSESSING OFFICER SHALL FORWARD THE DRAFT OF THE PROPOSED ORDER IF HE PROPO SES TO MAKE ANY VARIATION IN THE 4 ITA NO.7397/DEL/2018 INCOME OR LOSS RETURNED. THE AFORESTATED PROPOSAL IN THE DRAFT ASSESSMENT ORDER CLEARLY SHOW THAT THE ASSESSING OFFICER DID NOT INTEND TO M AKE ANY VARIATION IN THE INCOME OF THE ASSESSEE, THEREFORE, THE ASSESSMENT ORDER SHOULD HA VE BEEN FRAMED AS PER THE PROVISIONS OF SECTION 153 R.W.S. 143(3) OF THE ACT MEANING THEREBY THAT THE ASSESSMENT ORDER DATED 07.09.2018 IS BARRED BY LIMITATION. 10. IN THE LIGHT OF THE FACTS MENTIONED ELSEWHERE W HEN CONSIDERED WITHIN THE PROVISIONS OF SECTION 144C(1) SUPRA, WE HAVE NO HES ITATION TO HOLD THAT THE ASSESSMENT ORDER IS BARRED BY LIMITATION. 11. SINCE, WE HAVE HELD THAT THE ASSESSMENT IS BARR ED BY LIMITATION WE DO NOT FIND IT NECESSARY TO DWELL INTO MERITS OF THE CASE. THE AP PEAL FILED BY THE ASSESSEE IS, ACCORDINGLY, ALLOWED. DECISION ANNOUNCED IN THE OPEN COURT IN THE PRESENC E OF REPRESENTATIVES OF BOTH THE SIDES ON 19/05/2021. SD/- SD/- [AMIT SHUKLA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI; DATED: 19/05/2021. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI
Mehul