TaxTMI 
TaxTMI 
2016 (4) TMI 515
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.... under the Framework Agreements dated 05/07/2007 entered into between assessee company with Analjit Singh and Asim Ghosh ; (ii) an addition of Rs. 6,03,38,242/- on account of transfer pricing adjustment to the stated value of the international transaction of I.T. enabled services(ITes) rendered by assessee to its associated enterprise; (iii) a disallowance of Rs. 26,05,29,938/- being depreciation claimed by the assessee on goodwill relating to acquisition of Call Centre business, which has been denied; and (iv) disallowance of Rs. 7,61,91,250/- under section 14A of the Act on account of expenditure incurred in earning exempt income. A pertinent point made out by Ld. Representative for the assessee justifying stay on the recovery of the outstanding demand was that the aforesaid disputes are either directly covered by the judgments of the Hon'ble Supreme Court or that of the Hon'ble Bombay High Court in assessee's own case or the decisions by the higher courts rendered under similar circumstances. 3. Elaborating the plea that assessee had a good prima-facie case to succeed before the Tribunal on all the issues, the Ld. Representative for the assessee briefly touched upon the factu....
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....eflects the stake held directly or indirectly in VIL by CGP Investment Holding Ltd., Mauritius, A.S Group and A.G Group. It is sought to be explained that pre-acquisition, CGP India Investment Ltd., Mauritius held 7.28% in VIL through Telecom Investments India directly; 2.29% by virtue of holding 49% in A.G Mercantile Ltd.; and 3.71% by virtue of holding 49% in Scorpio Beverages Pvt. Ltd, thereby enabling it to hold 13.28% in VIL, whereas, post-acquisition, CGP India Investment Ltd., Mauritius holds 9.57% in VIL through Telecom Investments India directly; 2.29% by virtue of holding 49% in AG Mercantile Ltd.; and, 2.59% by virtue of holding 49% in Scorpios Beverages Pvt. Ltd., thereby enabling CGP India Investment Ltd., Mauritius to hold 14.45% in VIL, which reflected a net increase in its stake holding in VIL by 1.17%. The second transaction which has been noted by the Assessing Officer is the sale of 1,52,990 shares of A.G Mercantile Pvt. Ltd. to N.D. Callus Info Services Pvt. Ltd. This sale was made by individual shareholders of A.G Mercantile Pvt. Ltd., in terms of an agreement dated 10/05/2010 entered into between such individual shareholders, being Asim Ghosh, Rohitsava Chand,....
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....the impugned addition both in law and on facts. On facts, it was sought to be pointed out that the two transactions noted by the income tax authorities, namely, sale of shares of Telcom Investments India Limited by ND Callus Info Services to CGP India Investments Ltd. and sale of shares of AG Mercantile Company Pvt. Ltd. by the shareholders of such company to ND Callus Info Pvt. Ltd. were not connected whatsoever with the transfer or assigning of the right of call options held by the assessee in the Framework Agreements with AS and AG. 7. Further, it is explained that the assessee company is not even a party to the aforesaid transactions. It is also vehemently pointed out that though the ultimate effect of the transactions may have resulted in enhancement in the stake of Vodafone Group PLc in VIL by 2.31% but such increase is not because of transfer of call options held by the assessee, and coupled with the fact that the aforesaid two transactions are between domestic entities, the same could not be treated as an 'international transaction' within the meaning of section 92B of the Act so as to warrant an adjustment under the mechanism of transfer pricing contained in Chapter-X o....
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....144C(5) r.w.s. 144C(8) of the Act to say that the DRP is empowered to enhance, reduce or confirm a variation proposed in the draft assessment order, but cannot alter the character of such variation. On this basis the invalidity of the impugned addition is sought to be brought out. On this aspect, Ld. Representative for the assessee has made varied arguments to say that the addition itself was unsustainable and, therefore, assessee had a good prima-facie case to succeed before the Tribunal. 7.1 Coming to the next addition relating to the denial of depreciation on goodwill, the Ld. Representative for the assessee explained that pursuant to a business transfer agreement dated 08/11/2008, the appellant company had acquired a running Call Centre business from Vodafone Essar Gujarat Limited ('VEGL') as a going concern for a slump sale consideration of Rs. 160.54 crores, whereby all the assets and liabilities were taken over. The net assets of VEGL taken over by the assessee were valued and the consideration paid over and above the value of net assets was depicted in the books of account as 'Goodwill' amounting to Rs. 158.79 crores. In the return of income, assessee company claimed dep....
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.... show that its margin in the IT es segment was within + 5% range of the average margin of the comparable concerns. 9.1 In nutshell, on each of the points, the Ld. Representative for the assessee has asserted that assessee has a good prima-facie case to succeed before the Tribunal. Emphasizing that the balance of convenience was in favour of the applicant, Ld. Representative for the assessee pointed out that a huge demand has been worked out on the basis of transactions, which prima-facie have been wrongly treated as 'international transactions' within the meaning of section 92B of the Act. With regard to the addition made in respect of the assignment of call options, the Ld. Representative for the assessee further pointed out that the issue already stood decided in the light of the judgment of the Hon'ble Bombay High Court in the case of the assessee for the assessment year 2008-09 and, therefore, in the light of the Instruction No.1914 dated 2/12/1993 issued by CBDT, the corresponding demand is not liable to be recovered. Even otherwise, it is pointed out that the impugned assessment has been made at an income of Rs. 1237,89,76,780/- as against the returned income of Rs. 17,89,....
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....he short facts pointed out by the assessee in column-8 of its stay application, we find that on the issue of the addition of Rs. 6,03,38,342/-, the assessee has a good arguable case. 11.1 Now, we may dwell upon the substantive dispute in this year, which relates to an addition of Rs. 1180,29,26,796/- on account of assignment of call options. On this aspect, we have heard the various contentions raised by the assessee in slight detail. The factual matrix on this aspect has already been briefly noted by us in earlier paras, and the same is not being repeated for the sake of brevity. The sum and substance of the charge made against the assessee is that as a consequence of two transactions which we have noted earlier in Para-4 of this order, the Vodafone Group PLc's indirect stake holding in VIL has increased by 2.31%. The two transactions have been interpreted by the Assessing Officer to mean that assessee has exercised the right of call options available with it under the Framework Agreement dated 05/07/2007 entered into between assessee and Analjit Singh and Asim Ghosh. The pertinent point made out by the assessee is that similar charge made by the Revenue in assessment year 2008....