TaxTMI 
TaxTMI 
2013 (6) TMI 766
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.... for the year under consideration. 3. The sum and substance of the grievance of the assessee relates to facts and also on the point of law. Let us first understand the facts of the case in the right perspective. The assessee is engaged in the business of manufacture of key intermediates used in production of anti-ulcerant drug Pantoprazole. The assessee company is a joint venture between the Altana Pharma-AG, Germany and Cadila Health Healthcare Ltd., Ahmedabad. The commercial production was started in F.Y. 2001-02 relevant to A.Y. 2002-03. The impugned year is the fifth year of the manufacturing activity of the company. As per the terms of joint venture agreement between Cadila Heaalthcare Ltd., Ahmedabad and Altana Pharma-AG, Germany, the assessee company supplied all intermediates manufactured by it exclusively to Altana Pharma-AG, Germany. Since the company has exported the entire production manufactured by it, it entitles it to be registered as 100% EOU and, accordingly, entitled to claim exemption u/s. 10B of the Act. The assessee filed return of income declaring total income at Rs. 28,92,798/- after claiming exemption of Rs. 103.49 crores u/s. 10B of the Act. The return w....
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....t was further explained that the assessee company received further request from Byk Vermogensverwalatunh Gmbh, Germany, for transfer of 3,00,000 equity shares to Altana Pharma AG. The Board considered the request and approved the request of the said company for the transfer of 3,00,000 equity shares to Altana Pharma AG. The Assessing Officer did not accept this transaction. The Assessing Officer was of the firm belief that the assessee has made a conscious, deliberate and desperate attempt to transfer 1.5% (3,00,000) equity share holding back to Altana Pharma AG only to get out of the clutches of section 10B(9) of the Act. The Assessing Officer was of the opinion that the assessee did not follow the normal procedure. The transfer was stage managed and antedated. The Assessing Officer went on to hold that the transfer of shares is clearly an afterthought to show that 51% of the equity of the assessee lay with the same person on 31st March of the two different years to avail and continue the otherwise ineligible claim of deduction u/s. 10B of the Act. Considering all these facts in totality the Assessing Officer finally concluded that the assessee has violated the provisions of secti....
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....2002 49.9800% 49.9995% 49.9995% 1.5000% Cadila Healthcare Limited 49.9800% 49.9995% 49.9995% 49.9995% Mr. Pankar R.Patel 0.0200% 0.0005% 0.0005% 0.0005% Sub-Total 99.9800% 99.9995% 99.9995% 51.5000% Mr. Heinz W.Bull (succeeded by Mr. Hanz Joachim Lohrisch with effect from 14-08-2000) 0.0200% 0.0005% 0.0005% 0.0005% BYK Vermogensverwaltung GmbH (with effect from 30-11-2002) 0.0000% 0.0000% 0.0000% 48.4995% Grand-Total 100% 100% 100% 100% The facts on record show that since inception, the non-resident share holder in the assessee company was Byk Gulden Lomberg Chemische Fabric GmbH w.e.f. 01.07.2002. The said company changed its name to Altana Pharma AG. After the change in name the said company decided to transfer the share holding to its 100% subsidiary Byk Gulden Lomberg Chemische Fabric GmbH. However, for all practical purposes Altana Pharma AG continued to hold the ownership and beneficial interest and exercising the voting power in assessee company through its 100% subsidiary. Facts on record show that soon after the transfer of its share holding to its subsi....
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....ee which has also been verified from the bank statements of Altana Pharma AG. As the Assessing Officer himself has verified such clinching evidences and has accepted them in order, therefore, in our considerate view we do not find any reason to hold that there was a change in ownership to the detriment of the assessee company visa- vis section 10B(9) of the Act. Considering all the facts relating to transfer and the remand report, we hold that the substantial share holding was always with the assessee at the end of the financial year entitling it for the claim of exemption u/s. 10B(9) of the Act. The findings of the CIT(A) are reversed on this account. We, further find that the decision of the Tribunal in the case of WNS Global Services Pvt. Ltd. (supra), squarely apply on the facts of the case. After considering the judgments of the constitutional Bench in (i) Rayala Corporation Pvt. Ltd. and M.R.Pratap vs. Director of Enforcement, New Delhi reported as 1969 (2) SCC 412 and again in (ii) Kolhhapur Cane Sugar Works Ltd. vs. Union of India, reported as [2002] 2 SCC 536, the Tribunal at para 16 of its order held as under: "16. From the above proposition of law, it is clear t....