J.P. MORGAN ADVISORS INDIA P.LTD, MUMBAI V. DCIT RG 3(2), MUMBAI

ITA 7573/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9185 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: K
• Next Hearing Date: 22-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 24-12-2012
• Court: TRIBUNAL
• Keywords: Revision of order; Transfer pricing; International transaction; Fair market value; Notional interest
• Section: 143(3); 234B; 263; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 7573 /MUM/201 2 ASSESSMENT YEAR: - 2008 - 09 ITA NO. 3857/MUM/2014 ASSESSMENT YEAR: - 2008 - 09 J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED J.P. MORGAN TOWER, OFF CST ROAD, KALINA SANTACRUZ (EAST), MUMBAI 400098. VS.` DEPUTY COMMISSIONER OF INCOME TAX, RANGE 3(2), ROOM NO. 608, AAYAKAR BHAVAN, MK ROAD, MUMBAI 400 020. APPELLANT / RESPONDEN T ORDER PER BENCH, THESE ARE TWO APPEALS BY THE ASSESSEE. ONE IS DIRECTED AGAINST THE ASSESSMENT ORDER DATED 26.11.2012 PASSED U/S 143(3) R.W.S 144C(13) OF THE INCOME TAX ACT IN PURSUANT TO THE DIRECTIONS OF DRP DATED 5.9.2012 PASSED U/S 144C(5) OF THE INCOME TAX ACT AND ANOTHER IS DIRECTED AGAINST THE REVISIONS ORDER DATED 28.03.2014 PASS ED U/S 263 OF THE INCOME TAX ACT FOR THE A.Y. 2008 - 09. 2. IN THE APPEAL AGAINST THE ASSESSMENT ORDER PASSED U/S 144C(13) OF THE INCOME TAX ACT. , T HE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - ASSESSEE BY SHRI NISHANT THAKKAR REVENUE BY SHRI N. PADMANABHAN DATE OF HEARING 12.02.2015 DATE OF PRONOUNCEMENT 25 .03.2015 J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 2 | P A G E BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED (HEREINAFTER REFERRED TO AS 'THE APPELLANT') CRAVES LEAVE TO PREFER AN APPEAL AGAINST THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, RANGE 3(2), MUMB AI [HEREINAFTER REFERRED TO AS THE 'LEARNED AO'] UNDER SECTION 143(3) READ WITH SECTION 144C(13) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'), IN PURSUANCE OF THE DIRECTIONS ISSUED BY THE HON'BLE DISPUTE RESOLUTION PANEL I, (HEREINAF TER REFERRED TO AS THE 'HON'BLE DRP') ON THE FOLLOWING GROUNDS, EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO, AFTER CONSIDERING THE DIRECTIONS ISSUED BY THE HON'BLE DRP, HAS ERRED IN APPLYING THE PROVISIONS OF THE CHARGING SECTION OF CHAPTER X I.E. SECTION 92(1) OF THE ACT TO THE ISSUE OF EQUITY SHARE CAPITAL BY THE APPELLANT TO ITS HOLDING COMPANY AND ACCORDINGLY, CONSIDERED THE ISSUE OF EQUITY SHARES AS AN 'INTERNATIONAL TRANSACTION' WITHIN THE MEANING OF SECTION 92B(1) OF THE ACT; COMPUTED THE ARM'S LENGTH PRICE OF THE EQUITY SHARES ISSUED BY T HE APPELLANT AT RS 26.90. TREATED THE DIFFERENCE BETWEEN THE ARM'S LENGTH PRICE OF SHARES AND ACTUAL ISSUE PRICE AS A DEEMED LOAN PROVIDED BY THE APPELLANT TO ITS HOLDING COMPANY; FAILED TO APPRECIATE THAT TRANSFER PRICING DOES NOT PERMIT SECONDARY ADJUSTMENTS; COMPUTED THE NOTIONAL INTEREST ON SUCH DEEMED LOAN AND TAXING SUCH NOTIONAL INTEREST IN THE HANDS OF THE APPELLANT; FAILED TO APPRECIATE THAT THE INCOME TAX BEING A CHARGE OF TAX ON INCOME OF THE APPELLANT, THERE CANNOT BE ANY DEEMING FI CTION UNLESS OTHERWISE SPECIFICALLY PROVIDED BY THE STATUTE; 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AO, AFTER CONSIDERING THE DIRECTIONS OF THE HON'BLE DRP, ERRED IN ADOPTING 10.14% AS THE DOMESTIC COST OF BORROWING, DISREGARDING THE FACT THAT TH ERE WERE NO BORROWINGS AVAILED BY THE APPELLANT; J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 3 | P A G E 3. THE LD. AO ERRED IN NOT GRANTING CREDIT FOR TAX DEDUCTED AT SOURCE AMOUNTING TO RS. 221,837; AND 4. THE LD. AO ERRED IN LEVYING CONSEQUENTIAL ADDITIONAL INTEREST AMOUNTING UNDER SECTION 234B AND SECTION 234C OF THE ACT. 3. THE ASSESSEE ISSUED 172,040,000 EQUITY SHARES OF FACE VALUE OF RS. 10 AT PAR TO ITS HOLDING COMPANY, J.P. MORGAN SPECIAL SITUATIONS (MAURITIUS ) LIMITED. THE TPO DETERMINED THE ARMS LENGTH PRICE OF THE EQUITY SHARES ISSUED AT RS. 26. 90 PER SHARE AND TREATED THE DIFFERENCE BETWEEN THE ALP AND ACTUAL ISSUE PRICE AS A DEEMED LOAN ADVANCED BY THE ASSESSEE TO ITS HOLDING COMPANY/AE. ACCORDINGLY, THE TPO ADOPTED THE NOTIONAL INTEREST AT THE RATE OF 14.39% BEING ANNUALIZED AVERAGE YIELD ON A FIVE YEAR (BBB) RATED CORPORATE BONDS AND COMPUTED THE ADJUSTMENT BEING THE DIFFERENCE OF ALP OF THE SHARES AND ACTUAL ISSUE PRICE. 4. THE ASSESSEE CHALLENGED THE ACTION OF TPO BEFORE THE DRP. THE DRP DIRECTED THE AO/TPO THAT THE ARMS LENGTH INTEREST BE CONSIDERED AS DOMESTIC COST OF BORROWING OF THE ASSESSEE + 3% AS AGAINST 14.39% CONSIDERED BY THE TPO WHICH COMES TO 10.14% 5. BEFORE US, THE LD.AR HAS SUBMITTED THAT THIS ISSUE IS NOW COVERED BY THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD. VS. UNION OF INDIA AND ORS. 368 ITR 01 . HE HAS FURTHER POINTED OUT THAT THE HONBLE JUR ISDICTIONAL HIGH COURT HAS AGAINS DECIDED THE IDENTICAL ISSUE IN CASE OF M/S SHELL INDIA MARKETS PVT. LTD. 369 ITR 516 AS WELL AS IN NUMBER OF OTHER CASES WHEREIN THE JUDGMENT IN CASE OF VODAFONE INDIA SERVICES PVT. LTD HAS BEEN FOLLOWED. 6. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON THE ORDERS OF AUTHORITIES BLOW. J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 4 | P A G E 7. HAVING CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CA SE AS WELL AS RIVAL SUBMISSIONS. A T THE OUTSET, WE NOTE THAT THIS ISSUE REGARDING COMPUTATION OF FAIR MARKET VALUE OF SHARES ISSUED BY THE INDIAN SUBSIDIARY TO ITS HOLDING COMPANY AND SHORTFALL IN PREMIUM WAS TREATED BY THE TPO AS INCOME AS WELL AS LOAN ADVANCE GIVEN TO THE HOLDING COMPANY AND CON SEQUENT ADDITION HAS BEEN CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD (SUPRA). THE RELEVANT OBSERVATION AND FINDING OF THE HONBLE HIGH COURT ARE IN PARA 45 TO 49 AS UNDER: - 45. CHAPTER X OF THE ACT IS A MACHINERY PROVISION TO ARRIVE AT THE ALP OF A TRANSACTION BETWEEN AES. THE SUBSTANTIVE CHARGING PROVISIONS ARE FOUND IN SECTIONS 4, 5, 15 (SALARIES), 22 (INCOME FROM HOUSE PROPERTY), 28 (PROFITS AND GAINS OF BUSINESS), 45 (CAPITAL GAIN) AND 56 (INCOME FROM OTHER SOURCES). EVEN INCOME ARISING FROM INTERNATIONAL TRANSACTION BETWEEN A.E. MUST SATISFY THE TEST OF INCOME UNDER THE ACT AND MUST FIND ITS HOME IN ONE OF THE ABOVE HEADS I.E. CHARGING PROVISIONS. THIS THE REVENUE HAS NOT BEEN ABLE TO SHO W. 46. IT WAS NEXT SUBMITTED THAT THE MACHINERY SECTION OF THE ACT CANNOT BE READ DE HORS CHARGING SECTION. THE ACT HAS TO BE READ AS AN INTEGRATED WHOLE. ON THE AFORESAID SUBMISSION ALSO, THERE CAN BE NO DISPUTE. HOWEVER, AS OBSERVED BY THE SUPREME COURT IN CIT V. B.C. SRINIVASA SHETTI [1981] 128 ITR 294/5 TAXMANN.COM 1 , 'THERE IS A QUALITATIVE DIFFERENCE BETWEEN THE CHARGING PROVISIONS AND COMPUTATION PROVISIONS AND ORDINARILY THE OPERATION OF THE CHARGING PROVISIONS CANNOT BE AFFECTED BY THE CONSTRUCTION OF COMPUTATION PROVISIONS.' IN THE PRESENT CASE, THERE IS NO CHAR GING PROVISION TO TAX CAPITAL ACCOUNT TRANSACTION IN RESPECT OF ISSUE OF SHARES AT A PREMIUM. COMPUTATION PROVISIONS CANNOT REPLACE/ SUBSTITUTE THE CHARGING PROVISIONS. IN FACT, IN B.C. SRINIVASA SHETTI ( SUPRA ), THERE WAS CHARGING PROVISION BUT THE COMPUTA TION PROVISION FAILED AND IN SUCH A CASE THE COURT HELD THAT THE TRANSACTION CANNOT BE BROUGHT TO TAX. THE PRESENT FACTS ARE ON A HIGHER PEDESTAL AS THERE IS NO CHARGING PROVISION TO TAX ISSUE OF SHARES AT PREMIUM TO A NON RESIDENT, THEN THE OCCASION TO IN VOKE THE COMPUTATION PROVISIONS DOES NOT ARISE. WE, THEREFORE, FIND NO SUBSTANCE IN THE AFORESAID SUBMISSION MADE ON BEHALF OF THE REVENUE. 47. DURING THE COURSE OF HEARING THE LEARNED SOLICITOR GENERAL ALSO MADE SUBMISSIONS WITH REGARD TO TAXING INCOME IN THE HANDS OF THE PETITIONER EVEN THOUGH THE INCOME HAS ALLEGEDLY BEEN EARNED BY THE HOLDING COMPANY. NONE OF THE NOTICES ISSUED TO THE PETITIONER ON THE DRAFT ORDER PASSED BY AO ON THE IMPUGNED ORDER PASSED BY DRP EVEN PROPOSES TO ASSESS THE PETITIONER IN ITS REPRESENTATIVE CAPACITY. HENCE, THE PETITIONER HAD NO OCCASION TO CHALLENGE THE JURISDICTION OF THE REVENUE ON THE ABOVE ASPECT. THEREFORE, WE SEE NO REASON TO EXAMINE THE ISSUE. J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 5 | P A G E 48. BEFORE PARTING, WE MAY POINT OUT THAT IN ITS WRITTEN SUBMISSIONS, TH E REVENUE HAS RAISED AN ISSUE OF ALTERNATIVE REMEDY WHICH WAS NOT RAISED AT THE HEARING AND CONTENDED THAT THERE IS NO PATENT ILLEGALITY IN THE IMPUGNED ORDER WARRANTING INTERFERENCE BY THIS COURT. HOWEVER, THE VERY FACT THAT AT THE TIME OF ORAL SUBMISSION S, THE REVENUE SUPPORTED THE CONCLUSIONS IN THE IMPUGNED ORDER ON GROUNDS DIFFERENT FROM THOSE MENTIONED THEREIN WOULD ITSELF SPEAK VOLUMES OF THE PATENT NON SUSTAINABILITY OF THE IMPUGNED ORDER. THE PRELIMINARY OBJECTION, NOT RAISED AT THE HEARING, IS, CO MPLETELY DEVOID OF ANY SUBSTANCE. 49. FOR ALL THE ABOVE REASONS, WE FIND THAT IN THE PRESENT FACTS ISSUE OF SHARES AT A PREMIUM BY THE PETITIONER TO ITS NON RESIDENT HOLDING COMPANY DOES NOT GIVE RISE TO ANY INCOME FROM AN ADMITTED INTERNATIONAL TRANSACTIO N. THUS, NO OCCASION TO APPLY CHAPTER X OF THE ACT CAN ARISE IN SUCH A CASE. 8. WE FURTHER NOTE THAT IN THE CASE OF M/S SHELL INDIA MARKETS PVT. LTD. (SUPRA), THE HONBLE JURISDICTIONAL HIGH COURT HAS AGAIN DECIDED THE IDENTICAL ISSUE BY FOLLOWING THE JU DGMENT IN CASE OF VODAFONE INDIA SERVICES PVT. LTD. (SUPRA). ACCORDINGLY, FOLLOWING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD. (SUPRA), WE DELETE THE ADDITION MADE BY THE AUTHORITIES BELOW ON ACCOUNT OF SHORTFALL IN PREMIUM FOR ISSUANCE OF EQUITY SHARES BY THE A SSESSEE TO ITS HOLDING COMPANY HAS BEEN TREATED AS DEEMED LOAN. 9. GROUND NO. 3 IS REGARDING CREDIT OF TDS AMOUNTING TO RS. 2,21,837/ - 10. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE AO HAS NOT GIVEN THE CREDIT OF TDS OF RS. 2 , 21 , 837/ - DESPITE A RECTIFICATION PETITION U/S 154 FILED BY THE ASSESSEE. THUS THE LD. AR HAS SUBMITTED THAT THE AO MAY BE DIRECTED TO GRANT THE CREDIT OF TDS. THE LD. AR HAS POINTED OUT THAT SINCE THE ISSUE HAS NOT BEEN DISCUSSED IN THE J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 6 | P A G E IMPUGNED ORDERS, THEREFORE, THE AMOUNT OF TDS IS REQUIRED TO BE VERIFIED. SINCE THE ASSESSEE HAS ALREADY FILED A PETITION U/S 154 FOR GRA NT OF CREDIT FOR TAX DEDUCTED AT SOURCE OF RS. 2 , 21 , 837/ - , A CCORDINGLY, WE DIRECT AO TO VERIFY THE CLAIM OF ASSESSED AND THEN PASS THE APPROPRIATE ORDER. 11. IN THE APPEAL AGAINST THE REVISION ORDER THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED (HEREINAFTER REFERRED TO AS 'THE APPELLANT') CRAVES LEAVE TO PREFER AN APPEAL AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX 3, MUMBAI [HEREINAFTER REF ERRED TO AS THE 'LEARNED CIT') UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') FOR ASSESSMENT YEAR 2008 2009, ON THE FOLLOWING GROUNDS, EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. ON THE FACTS AND CIRCUMSTA NCES OF THE CASE AND IN LAW, THE LEARNED CIT ERRED IN INITIATING PROCEEDINGS / ASSUMING JURISDICTION / EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT AND SETTING ASIDE THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 144C(1) OF THE ACT ('DRAFT ORDER'), ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 144C(13) OF THE ACT ('FINAL ORDER) AND DIRECTING THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX 3(2) (,THE LEARNED AO') TO FRAME ASSESSMENT KEEPING IN MIND THE DIRECTIONS ISSUED IN THE ORDER UND ER SECTION 263 OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN TREATING BOTH THE DRAFT ORDER AND FINAL ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE ON THE BASIS THAT THE DIFFERENCE BETWEEN THE ARM'S LENGTH P RICE OF THE EQUITY SHARES DETERMINED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, TRANSFER PRICING 1 (5) ('THE LEARNED TPO') AND THE ISSUE PRICE OF THE EQUITY SHARES AMOUNTING TO RS 2,907,476,000 IS INCOME IN THE HANDS OF THE APPELLANT AND NO TRANSFER P RICING ADJUSTMENT WAS MADE BY THE LEARNED AO IN RESPECT OF THE SAME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT ERRED IN HOLDING THAT THE LEARNED AO DID NOT PASS THE DRAFT ORDER AND FINAL ORDER IN CONFORMITY WITH THE DIRECTI ONS GIVEN BY THE LEARNED TPO WHEN THE LEARNED TPO HAD NOWHERE IN HIS ORDER ISSUED UNDER SECTION 92CA(3) OF THE ACT DIRECTED THE LEARNED AO TO MAKE ANY TRANSFER PRICING ADJUSTMENT IN RESPECT OF THE ALLEGED BENEFIT PROVIDED BY THE APPELLANT TO ITS PARENT COM PANY IN TERMS OF THE ALLEGED LOAN BEING THE DIFFERENCE BETWEEN THE ARM'S LENGTH PRICE OF THE EQUITY SHARES DETERMINED BY THE J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 7 | P A G E LEARNED TPO AND THE ISSUE PRICE OF THE EQUITY SHARES AMOUNTING TO RS 2,907,476,000, 4. WITHOUT PREJUDICE TO GROUND NO. 1 TO GROUND NO. 3 ABOVE, ON ONE HAND WHERE THE DIFFERENCE BETWEEN THE ISSUE PRICE OF THE EQUITY SHARES AND ARM'S LENGTH PRICE OF EQUITY SHARES DETERMINED BY THE LEARNED TPO HAS ALREADY BEEN TREATED AS A LOAN FROM THE APPELLANT TO ITS PARENT COMPANY, NOTIONAL INTEREST HAS BEEN IMPUTED ON THE SAME AND A TRANSFER PRICING ADJUSTMENT HAS ALREADY BEEN MADE IN THE HANDS OF THE APPELLANT, THE LEARNED CIT ERRED IN SIMULTANEOUSLY HOLDING THAT ALLEGED LOAN SHOULD ALSO BE CONSIDERED AS INCOME IN THE HANDS OF THE APPELLANT. 5. W ITHOUT PREJUDICE TO GROUND NO. 1 TO GROUND NO. 4 ABOVE, THE LEARNED CIT ERRED IN RELYING ON THE ARM'S LENGTH PRICE OF THE EQUITY SHARES DETERMINED BY THE LEARNED TPO AT RS 26.90 PER SHARE AND THEREBY, ERRED IN HOLDING THAT TRANSFER PRICING ADJUSTMENT SHOUL D HAVE BEEN MADE IN THE DRAFT ORDER AND FINAL ORDER FOR THE DIFFERENCE BETWEEN THE ISSUE PRICE OF THE EQUITY SHARES AND THE ARM'S LENGTH PRICE OF THE EQUITY SHARES DETERMINED BY THE LEARNED TPO, AMOUNTING TO RS 2,907,476,000 AND BASED ON THIS, THE LEARNED CIT ERRED IN INITIATING THE PROCEEDINGS AND PASSING AN ORDER UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. GROUND NO. 1 TO 3 12. AS WE HAVE DISCUSSED ABOVE THAT THE ASSESSEE ISSUED 172,040,000 SHARES OF FACE VALUE AT RS. 10 AT PAR TO ITS HOLDING COMPANY J.P. MORGAN SPECIAL SITUATIONS (MAURITIUS ) LIMITED. THE TPO DETERMINED THE ALP OF THE EQUITY SHARES ISSUED AT RS. 26.90 PER SHARE AND TREATED THE DIFFERENCE BETWEEN THE ALP AND ACTUAL ISSUE PRICE AS A DEEMED LOAN ADVANCED BY THE ASSESSEE TO ITS HO LDING COMPANY/AE AND CONSEQUENTLY APPLIED THE ARMS LENGTH INTEREST RATE OF 14.39% FOR MAKING THE TRANSFER PRICING ADJUSTMENT. SUBSEQUENTLY, THE COMMISSIONER FOUND FROM THE RECORD THAT WHILE FRAMING THE ASSESSMENT AND MAKING THE ADJUSTMENT U/S 92CA, THE AO /TPO HAS NOT MADE THE ADJUSTMENT ON ACCOUNT OF DIFFERENCE IN THE SHORTFALL OF PREMIUM AS INCOME OF THE ASSESSEE IN RESPECT OF THE EQUITY SHARES ISSUED BY THE J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 8 | P A G E ASSESSEE TO ITS HOLDING COMPANY. ACCORDINGLY, THE COMMISSIONER ISSUED A SHOW CAUSE NOTICE DATED 1 1.3.2014 U/S 263 PROPOSING TO PASS SUCH AN ORDER ENHANCING AN D MODIFYING THE ASSESSMENT ORDER / CANCELLING THE ASSESSMENT AND DIRECTING THE FRESH ASSESSMENT UNDER THE PROVISIONS OF SECTION 263. THE ASSESSEE OBJECTED TO THE PROPOSED ENHANCEMENT U/S 263 BY THE COMMISSIONER. THE LD. COMMISSIONER PASSED THE IMPUGNED ORDER HOLDING THAT THE AO FAILED TO MAKE THE ADJUSTMENT TOWARDS THE BENEFIT OF LOAN ADVANCED BY THE ASSESSEE TO ITS HOLDING COMPANY AS INCOME IN THE HANDS OF THE ASSESSEE AND THE ORDER PASSED BY THE A O IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE COMMISSIONER SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE AO TO FRAME THE ASSESSMENT AS PER THE T HE DIRECTIONS GIVEN IN THE IMPUGNED REVISION ORDER. 13. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ISSUE IS DIRECTLY COVERED BY THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD (SUPRA), THE RELEVANT FINDING OF THE HONBLE HIGH COURT HAS BEEN PRODUCED IN THE FOREGOING PARAS OF THIS ORDER. ACCORDINGLY, FOLLOWING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD. (SUPRA) , WE SET ASIDE/QUASH THE IMPUGNED REVISION ORDER PASSED U/S 263 OF T HE ACT. 1 4 . GROUND NO. 4 IS REGARDING INTEREST U/S 234B AND 234C OF ACT., IS CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC FINDINGS. J.P. MORGAN ADVISORS INDIA PRIVATE LIMITED 9 | P A G E 1 4 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH 2015 SD/ - SD/ - ( D. KARUNAKARA RAO ) (VIJAY PAL RAO) ( ACCOUNTANT MEMBER ) (JUDICIAL MEMBER) MUMBAI DATED 25 .03.2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, K BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI