AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 1046
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.... year on the following among other grounds: 1. Assessment is null and void 1.1 The learned Transfer Pricing Officer ["TPO"]/DCIT/ Dispute Resolution Panel ["DRP"] erred in passing orders / issuing directions in the name of 'Pesak Ventures Limited' which was non-existing as on the date of issuance of orders/directions on account of its voluntary winding up in terms of dissolution certificate dated 24 May 2013 issued by the Department of Registrar of Companies and Official Receiver, Cyprus. Considering the facts and circumstances of the appellant's case and the law prevailing on the subject, both the draft assessment order dated 29 March 2016 passed under section 143(3) read with section 144C(1) as well as the final assessment order dated 30 January 2017 passed under section 143(3) read with section 144C (13) are illegal and void. 2. Transfer pricing adjustment 2.1 The AO/DRP/TPO erred in making an upward adjustment of Rs. 24,78,73,420/- to the value of transaction related to sale of Compulsorily Convertible Debentures ["CCDs"] to Shriram Properties Limited ["Shriram"], without providing reasonable and adequate opportunity of being heard to the Appellant as....
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....RP / TPO has erred in computing present value of future cash flows while applying the DCF method. 6. No Transfer Pricing implication as income is not taxable under the Double Taxation Avoidance Agreement ["DTAA"] 6.1 The learned AO / DRP / TPO erred in not considering the fact that the impugned transaction of sale of CCDs to Shriram is not liable to tax in India under India-Cyprus DTAA and transfer pricing adjustment is not warranted. 6.2 The learned AO / DRP / TPO erred in not appreciating the fact that there was no intention of the Appellant to shift profits outside India and the impugned transaction related to sale of CCDs to Shriram does not warrant any transfer pricing adjustment. 6.3 The learned AO / DRP / TPO erred in disregarding the facts and submissions made by the Appellant without providing cogent reasons. 7. Computation of gain 7.1 The learned DCIT/DRP erred in substituting fair market value as computed by the TPO for the actual sale consideration received by the Appellant on sale of CCDs and computing the gain accordingly. 8. Re-characterization of income 8.1 The learned DCIT/DRP erred in re-characterising the gain on sale of CCDs as worked out....
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.... law in levying interest under section 234B of the Income-tax Act, 1961 without appreciating that the Appellant was not liable to pay advance tax on the impugned income as the primary liability of deduction tax on the said income was that of the payer." 2.1 This additional ground was, however, withdrawn by the Ld. counsel appeared for the assessee before hearing of the case on 12/06/2018. Hence, it is dismissed as infructuous. 3. Briefly stated facts of the case are that assessee, i.e., M/s Pesak Ventures Ltd., a limited liability company, was incorporated in Cyprus on 23/01/2008 under the Cyprus Companies Law, as a wholly-owned subsidiary of the "Dinesh SA Investments LLC". The principal activity of the company was of holding the investment in Indian incorporated companies engaged in real estate sector as venture capital organization. The assessee i.e. M/s Pesak Ventures Ltd., was a tax resident of Cyprus, holding valid tax residency certificate The assessee filed return of income on 28/11/2012, declaring nil income. The case was selected for scrutiny on the basis of Form No. 3CEB submitted by the assessee, wherein transaction with Associated Enterprises (AEs) is found to be mo....
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....epartment of Registrar of companies and official receiver, Cyprus. 4.1 The Ld. counsel submitted that this objection was raised before the Ld. DRP, however, it was not adjudicated by the Ld. DRP. He submitted that if this ground is decided in favour of the assessee, other grounds might be rendered only academic and may not be required to adjudicate. 4.2 On the other hand, the Ld. DR submitted that the issue of liquidation and compliance of relevant provisions of the law in this regard have not been brought before the Ld. Assessing Officer. He submitted that first of all, this issue need to be restored to the file of the Assessing Officer for verifying compliance of the provisions of the Income Tax Act by a company under liquidation and then the Assessing Officer should decide on the issue of jurisdiction in case of the liquidated company i.e. the assessee. 4.3 We have heard the rival submissions and perused the relevant material on record on the issue in dispute raised in Ground No. 1 of the appeal. Before the Tribunal, the appeal has been filed in prescribed form no. 36B and verified by Sh. Dilshaad Rajabalee, authorized signatory of "Sun Apollo India Real Estate LLC, Mauritius....
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....is employed by or on behalf of the non-resident; or (b) who has any business connection with the non-resident; or (c) from or through whom the non-resident is in receipt of any income, whether directly or indirectly; or (d) who is the trustee of the non-resident; and includes also any other person who, whether a resident or non-resident, has acquired by means of a transfer, a capital asset in India :" 4.7 Further, section 176 of the Act has in case of discontinued business or dissolution has provided of making assessment in the year of such event at the discretion of the Assessing Officer. According to sub-section 3 of section 176, any person discontinuing any business of profession is required to give notice of such discontinuance within 15 days thereof. Further, subsection 5 of the section 176 has provided for issuing notice for making assessment of the discontinued entity under section 176(1). The relevant subsection is reproduced as under: "Discontinued business. 176. (1) ..................................... (2) ............................. (3) ....................... (3A) ....................... (4) .............................. (5) Where an ....
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....nd also in case of the liquidation, the liquidator of the company is required to give notice to the Assessing Officer, who is entitled to assess the income of the company. 4.10 In the instant case before us, there is no such information available on record, whether the Assessing Officer was informed about the discontinuance of the business or the liquidation process of the company. Though the Ld. counsel submitted that the Assessing Officer was informed about the dissolution of the company but no such information has been provided by the Ld. counsel of the assessee before us that the information was provided as per the requirements of the Act. 4.11 The issue of validity of making assessment on non-existence entity has been decided by the Hon'ble Delhi High Court in the case of Spice Infotainment Limited Vs. CIT, (2012) 247 CTR 500, wherein it is held that the assessment in the name of the company which has been amalgamated with another company and stands dissolved, is null and void. The Hon'ble high court further held that assessment framed in the name of non-existent entity is a jurisdictional defect and not merely a procedural irregularity of the nature which can be cured by in....
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....his agent, allowed the assessment proceeding to continue against the deceased without any objection and let the Assessing Officer make an assessment order after allowing to him a full opportunity of being heard. The Hon'ble Gujarat High Court held that, in such a case, it would not be open for him to take a plea at the appellate stage, as a last resort or as an afterthought, that the proceedings taken and the assessment order made against the deceased are nullity. The Hon'ble High Court held that in such cases, the assessment is liable to be set-aside for a fresh assessment in accordance with law instead of its annulment. 4.16 In the instant case before us, we have observed that compliance of the assessment proceeding before the Assessing Officer has been made from time to time by the persons authorized in this behalf and proceedings have not been challenged due to lack of jurisdiction. According to the available records, the validity of the jurisdiction has been challenged for first time before the Ld. DRP. In view of the above circumstances, following the finding of the Hon'ble Gujarat High Court in the case of Sumantbhai C Munshaw (supra) the assessment order should not be null....