TaxTMI 
TaxTMI 
2015 (3) TMI 1133
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....he assessee has raised following grounds in this appeal:- "1. On the facts and circumstances of the case, the learned AO, after considering the directions issued by the Honourable 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 the Appellant at Rs. 51.74. - treated the difference between the arm's length price of shares and actual issue price as a deeme....
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....e AO/TPO to adopt the domestic cost of borrowing of the assessee plus 3% as against 14.39% per annum considered by the TPO. 4. Before us, the Ld.AR has submitted that this issue is now covered by the Judgment of Hon'ble 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 Hon'ble Jurisdictional High court has against 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. 5. On the other hand, the Ld. DR has relied upon the orders of authorities blow. 6. Having considered the facts and cir....
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....n 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 charging 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 computation 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 invoke the computation provisions does not arise. We, therefore, fi....
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.... Thus, no occasion to apply Chapter X of the Act can arise in such a case." 7. We further note that in the case of M/s Shell India Markets Pvt. Ltd. (supra), the Hon'ble Jurisdictional High Court has again decided the identical issue by following the Judgment in case of Vodafone India Services Pvt. Ltd. (supra). Accordingly, following the Judgment of Hon'ble 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 assessee to its holding company has been treated as deemed loan. 8. Ground No. 2 is regarding non granting of credit of TDS of Rs. 14,739,699/-. 9. We have heard the Ld. A....