TaxTMI 
TaxTMI 
2018 (8) TMI 1760
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....e learned Commissioner of Income Tax (Appeal) -4, Mumbai has erred in confirming the additions made by the Assessing Officer on account of expenditure amounting to Rs. 43,47,723/- incurred in connection with the sale of shares of M/s LIC Mutual Fund Asset Management Co. Limited and M/s LIC Mutual Fund Trustee Co. Limited, without appreciating the facts of the case and the submissions made during the course of the assessment /remand/appeal proceedings. 2) On the facts and circumstances of the case and in law, the learned Commissioner of Income -tax - (Appeal) -4, Mumbai erred in not giving direction to the Assessing Officer to set off and adjust the unabsorbed carry forward long term capital loss for assessment year 2009-10 against the long term capital gains earned on the sale of shares of LIC Asset Management Company Ltd., and LIC Mutual Fund Trustee Company Limited. 3) The appellant craves leave to add to, modify or delete the above grounds of appeal each of which are independent of the other." 3. The brief facts of the case are that the assessee derives income from housing finance business. The assessee is a listed company having its shares listed on Stock E....
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....red wholly and exclusively in connection with transfer of shares of LICMF-AMC. The AO disallowed the claim of expenses of Rs. 96,73,108/- as the same cannot be allowed as deduction u/s 48 of the 1961 Act being not incurred wholly and exclusively in connection with transfer of shares of LICMF-AMC, which was consequently added by the AO to the income of assessee , vide assessment order dated 22.10.2013 passed by the AO u/s 143(3) of the 1961 Act. 4. Aggrieved by the assessment order dated 22.10.2013 passed by the AO u/s 143(3) of the 1961 Act , the assessee filed first appeal with Ld. CIT(A) . The assessee made detailed submissions before Ld. CIT(A). The assessee submitted additional evidences before learned CIT(A) vide submissions dated 30.08.2014(pb/page 235) and prayed for its admission vide Rule 46A(1)(d) of Income-tax Rules, 1962 as these additional evidences in the opinion of the assessee goes to the root of the matter. The Ld. CIT(A) admitted these additional evidences and called for remand report from AO . The AO submitted remand report dated 24.07.2015 and relevant extracts thereof are reproduced as under:- "14.1. Legal Consultant (Amarchand Mangalds Suresh A Shr....
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....s. The same specifies the scope of work which covers matters relating to the completion of the envisaged transaction i.e. induction of a strategic investor through either a divestment of a minority stake or issuance of fresh shares in LIC AMC. b. The invoices/bills enclosed as additional evidence are as under: Thus as is clear from the above discussion, that the bills /invoices do not specify the purpose for which the said professional fee payment was made, and as such it cannot be held that the said expenditure was incurred by the assessee wholly and exclusively towards earning of income shown under the head long term capital gain by it. d. It can also be seen that the total invoices submitted amount to Rs. 1,42,04,260 whereas the claim of the expense is only Rs. 1,36,42,460/-. A careful examination reveals SNo Reference Amount Remarks 1 Letter of PwC dt 31,3.2008 addressed to LIC AMC regarding invoices raised 11,23,600 The said letter has a general remark that the said payment is towards professional fees. No details as to the purpose for which the said services were rendered is given. In the sub it is merely mentioned that the project is 'Project C....
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....cannot be held that the said expenditure was incurred the assessee wholly and exclusively towards earning of income shown under the head long term capital gains by it. 14. 4. Valuation AMC( Chaturvedi & Co.) Rs. 46.878 a. Assessee has furnished valuation note of Chaturvedi and Co dt 24,7.2010 of shares of LIC AMC as on 31.3.2010. The same specifies that the purpose of valuation is to determine the fair value of shares of LIC AMC for the proposed acquisition of shares by Nomura in LIC AMC. b. The invoices/bills enclosed as additional evidence are as under: SNo Reference Amount Remarks 1 Letter of Chaturvedi & Co dt 25.8.2009 addressed to LIC AMC regarding invoices raised 2,758 The said letter mentions that the payment is towards ascertaining the net worth for FY 2008-09 and is clearly not relatable to the transaction under consideration 2 Letter of Chaturvedi & Co dt 5.9.2009 addressed to LIC AMC regarding invoices raised 22,060 The said letter mentions that the payment is towards valuation of shares as on 31.3.2009 and is clearly not relatable to the transaction under consideration which involved valuation o....
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...., which appear to be in order, the assessee has not been able to establish that the remaining expenditure claimed as deduction has been incurred wholly and exclusively for earning the income taxed under the head long term capital gain,and therefore its claim remains unsubstantiated." The copy of remand report of the AO was furnished by Ld. CIT(A) to the assessee for rejoinder. The assessee in rejoinder submitted following reply which is reproduced hereunder:- " On the basis of the remand report received and subsequent to the examination of the additional evidence submitted, the Appellant requests you to consider the claim of Rs. 96,73,108/- being expenses included by the Appellant on sale of shares, the break up of which is as under:- A detailed response pertaining to the genuineness of the claim of each item of expenditure specified Legal ConsulA detailed response pertaining to the genuineness of the claim of each item of expenditure specified in (i-vi) above is made hereunder: i) Legal Consultant (Amarchand Mangaldas Suresh A Shroff & Co)-R$, 1,91.49,387 (out of which an amont of Rs. 8,42,700 is disallowed): Sr No. Assessing Officer's....
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....ional fees and in the subject it is mentioned as Project Cash The engagement letter dated 21.08.2008 with Price Waterhouse Coopers Private Limited clearly specifies the advisory services to be provided for divestment of minority stake in LIC Asset Management Company, Therefore, raising of invoices and its payment thereon was merely a formality ,based on the milestones as agreed in the engagement letter. Hence, fees paid towards invoices were only in adherence to the terms of engagement. It may be noted that, the Assessing officer has not raised any question as to the authenticity or genuineness of payment to Price Waterhouse Coopers Private Limited. However, the conclusion drawn by Assessing Officer questioning the nature of services rendered by Price Waterhouse Cooper Private Limited is based on the fact that the services are not clarified nor are the invoices in any way linked to the mandate given for the said transaction. Accordingly, the Appellant confirms that the said expenditure was incurred wholly and exclusively towards earning of income shown under the head long term capital gain by it. iii) Scrutinizer to the postal ballot from unit holders (Rathi &....
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....ed out as per guidelines of Reserve Bank of India Thus, the expenditure incurred by the Appellant is wholly and exclusively for the purpose of carrying out the transaction pertaining to the sale of shares- The Appellant further draws your attention to section 48 of the Act which is as under: The income chargeable under head "Capital gains" shall be computed by deducting from the full value of consideration received or accruing as a result of the transfer of capital asset namely:- i) Expenditure incurred wholly and exclusively in connection with such transfer ii) ...... Thus, the word "expenditure" used in section mandates it should be distinctly related and integrally connected with the transfer of shares. It does not specify that the expenditure incurred will be eligible for deduction if it is made during the year in which the sale of shares is carried out. Also, the Bombay High Court in the case of CIT vs. ShakuntalaKantilal (190 ITR 56,59), has held that the expression 'in connection with such transfer' is wider and more liberal in meaning than the phraseology 'for the transfer.' By reason of employing such a wide expressi....
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....usively for earning income under the head capital gains The Appellant contends that the invoice specifies the valuation analysis carried out on 11.07.2010, the Assessing Officer cannot take a stand that since no share valuation note is furnished the expenditure has not been incurred wholly and exclusively for earning of income under the head capital gains. Your attention is highlighted to clause 3.2(k) of page 48 of the share purchase agreement wherein it has been agreed by the parties to the valuation certificate to be issued by a registered Chartered Accountant as per the Reserve Bank of India guidelines. Thus the opinion formed by the Assessing Officer that the expenditure is not wholly and exclusively for carrying out the sale transaction is incorrect.. vi) Authorised Dealer (ICICI) charges for EC TRS documentation as per RBI requirement for AMC and Trustee CO. Rs. 33,090/- Sr No. Assessing Officer's Findings Appellant's Response 1. Assesse has only furnished no objection certificate from Reserve Bank of India dated 24.05 2010 No proof of payment has been submitted by the assesse in this regard. The Appellant states that the Reserve Bank of....
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....e has not explained the expenditure related to sale of investments. By letter dated 05.09,2013, appellant has only given information related to sharing of cost, total legal cost comprises Legal Consultancy Charge, Advisory Charge, Fees of Scrutinizer and Valuation AMC Charge, totaling to Rs. 3,31,79,629/-. The appellant proportionately claimed the expenditure to the extent of Rs. 96,73,108/-However, the Assessing Officer has held that appellant has faded to establish that the legal cost claimed to be expenditure incurred in connection with transfer of shares, hence he has disallowed entire expenditure claimed by the appellant. During the course of appellate proceedings, appellant has submitted various details and evidences, hence matter was remanded to the Assessing Officer by letter dated 08.09.2014. In compliance the Assessing Officer has submitted a Remand Report dated 24.07.2015 which has been reproduced earlier. The copy of Remand Report was given to the appellant and appellant has given rejoinder by letter dated 08.09.2015. A careful perusal of Remand Report as well as counter representation reveals that findings of the Assessing Officer in the Assessment Order is not fully a....
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....be allowed u/s.48 of the Income-Tax Act. Similar is the fact in respect of expenditure of Rs. 57,908/- related to Valuation Trustee Co. As regards Authorised dealer (ICICI) charges for FC-TRS, no proof has been submitted by the appellant before the Assessing Officer, hence such expenditure also cannot be allowed. Now, actual expenditure related to such transfer is to be worked out for allowance. 5.6. During the course of appellate proceeding, it was reviewed and found that all the expenditure claimed by the appellant totalling to Rs. 96,73,108/- is not allowable, hence as discussed hereinabove, disallowable expenditure has to be worked out. The working of disallowable expenditure is as under:- Head Amount (Rs.) Expenditure to be borne by GIG HFL Legal Consultant (Amarchand Mangaldas Suresh A. Shroff & Co.) 1,91,49,387 96,21,417 Consultant and Advisor (Price Waterhouse Coopers P. Ltd.) 1,36,42,460 Scrutinizer to the postal ballot obtained from unit holders (Rathi & Associates) 2,82,996 Valuation AMC (Chaturvedi & Co.) 46,878 13,637 Valuation Trustee Co. (Shah Gupta & Co.) 57,908 4,964 Authorised dealer (ICICI) charges for F....
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....n not allowing assessee to carry forward and set off of long term capital loss of Rs. 75,83,082/- incurred in earlier assessment year 2009-10 against long term capital gains earned by the assessee during the previous year relevant to impugned assessment year under consideration. The Ld. CIT(A) vide appellate order dated 21.01.2015 observed that the AO has not denied set off of carried forwards of long term capital loss and the grievance of the assessee is not genuine and no prejudice is caused to the assessee which requires adjudication by learned CIT(A). It was observed by Ld. CIT(A) that if the claim of the assessee is correct and long term capital loss was there of Rs. 75,83,082/- incurred by the assessee in AY 2009-10, then the AO is duty bound to allow set off of said loss against long term capital gains earned by the assessee during this year. It was observed by learned CIT(A) in his appellate orders dated 21.01.2015 that no plain administrative directions can be given to the AO under these circumstances unless there is a denial of genuine claim. 7. The Ld. Counsel for the assessee opened argument before the Bench by submitting that there was sale of shares of LICMF-AMC by....
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....hem to Nomura . It was submitted that so far as distribution share ratio amongst consortium parties is concerned , the matter related to distribution share ratio is not in dispute as learned CIT(A) has accepted said ratio of distribution of costs amongst consortium parties as adopted by assessee and Revenue is not in appeal before the tribunal against such adoption of ratio of share of distribution of expenses nor any Cross Objections are filed by Revenue against the appeal filed by the assessee. Our attention was drawn to page 170/pb wherein letter dated 06-06-2011 was written by assessee to LIC Nomura Mutual Fund enclosing its share of cheque of Rs. 96,73,108/- towards expenses relating to costs incurred in connection with sale of share of LICMF-AMC. Our attention was also drawn to letter dated 13.04.2011 written by LIC Nomura Mutual Fund Asset Management Co. Limited to assessee relating to sharing of costs with selling shareholders, wherein total sale consideration of the entire transaction of sale of shares of LICMF-AMC by all three consortium parties of their respective shares sold is stated to be Rs. 308.01 crores and the total assessee‟s share of cost incurred towards ....
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....ncern. The learned counsel for the assessee submitted that to the best to their knowledge no appeal was filed by the department against the part relief granted by the Ld. CIT(A). The learned DR also could not place on record any evidence to substantiate that Revenue has filed any appeal against part relief granted by learned CIT(A). Our attention was drawn to the order of authorities below. Our attention was also drawn to various agreements entered into in connection with professionals engaged by assessee through LIC Asset Management Company for induction of strategic investor in LICMF-AMC , undertaking valuation of the shares of LICMF-AMC, due diligence of LICMF-AMC, documentation of the transaction and for seeking necessary regulatory approval/clearances in connection with the sale of shares by consortium parties in favour of Nomura. Our attention was drawn to various invoices raised by these professional w.r.t. agreements entered into in connection with induction of strategic investor in LICMF-AMC, valuation of shares of LICMF-AMC and for obtaining regulatory approval/clearances in connection with the sale of shares of LICMF-AMC by consortium parties in favour of Nomura. The sai....
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....ed that assessee‟s share in payment of fees/expenses of Rs. 2,82,996/- paid to Rathi and Associates also stood disallowed by learned CIT(A).It was submitted that Rathi and Associates were undertaking professional work of organising postal ballots for seeking shareholders approval for transaction under consideration which is necessary before sale/transfer of shares as per requirements of law. The learned CIT(A) upheld disallowance of the expenses paid to Rathi and Associates on grounds of being not being incurred wholly and exclusively in connection with transfer of shares. Similarly , the assessee‟s share in payments towards fees/expenses of Rs. 57,908/- paid to Shah Gupta and Company and Rs. 46,878/- paid to Chaturvedi and Company stood disallowed by learned CIT(A) on the grounds that these are not expenses incurred wholly and exclusively in connection with transfer of shares. Our attention was drawn to two RBI approvals both dated 24-05-2010 vide approval number FE.CO.FID.CO.No. 29155/10.21.176(Vol.II)/2009-10 and approval number FE.CO.FID.CO.No.29169/ 10.21.176 (Vol.II)/2009-10 which were obtained in connection with the transaction of sale of shares of LICMF-AMC held....
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....mpugned assessment year under consideration before us is placed wherein the assessee has sought to set off said carried forward long term capital loss of Rs. 75,83,082/- against long term capital gains earned by the assessee for relevant previous year under consideration before us. The Ld. DR on the other hand relied upon the orders of the authorities below .Our attention was drawn to the assessment order passed by the AO, remand report submitted by the AO and finally the appellate order passed by learned CIT(A) and prayer was made to confirm the appellate order passed by learned CIT(A).The Ld. DR submitted that learned CIT(A) has rightly disallowed the expenses being fees/expenses paid to professionals as these expenses were not incurred wholly and exclusively in connection with transfer of shares of LICMF-AMC by the assessee. Our attention was drawn to page no. 210 of the paper book wherein letter dated 06.08.2008 written by „Amarchand & Mangadas and Suresh A Shroff‟ is placed which is in favour of LIC Mutual Fund Asset Management Company wherein they have referred to work related to some „Project Life‟ and there is reference to proposed investment by N....
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....of such costs against long term capital gains earned by it. The background of this legal and professional costs so claimed to be incurred by the assessee and sought to be adjusted against long term capital gains earned on sale of shares of LICMF-AMC to Nomura is with respect to payments made towards fees/expenses to certain legal and financial professionals/advisors who were appointed in connection with the completion of transaction of induction of strategic investor in LICMF-AMC through divestment of minority stake or by way of issuance of fresh shares in LICMF-AMC to Nomura . These legal and financial professionals were engaged to assist and advise consortium parties to the agreement in due diligence as well ensuring that the transaction for induction of strategic partner in LICMF-AMC and consequently divestment of shares of LICMF-AMC by existing shareholders including assessee in favour of Nomura complies with various applicable laws, rules and regulations concerning securities law, taxation law, foreign exchange regulations, company law etc. and assist in obtaining all necessary regulatory and legal clearances/approvals in connection with the aforesaid transaction of induction ....
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.... transaction of induction of Nomura as strategic investor into LICMF-AMC is completed and concluded successfully both commercially as well the same is compliant with all applicable laws , rules and regulations including securities law, company law, law governing and regulating foreign exchange , tax laws and other applicable laws which could withstood scrutiny of law. These professionals/advisors were also required to identify and thereafter ensure that several regulatory clearances/approvals as are required for the proposed transaction are duly obtained to avoid any adverse legal consequences at a later stage . The „LIC Mutual Fund Asset Management Company Limited‟ front ended and thus entered into agreements with these legal and financial professionals/advisors on behalf of consortium parties and thereafter costs were allocated by „LIC Mutual Fund Asset Management Company Limited‟ amongst selling shareholding in proportion to their ratio of sale proceeds received by them from selling shares of LICMF-AMC to Nomura in accordance with the terms of contract entered into with consortium parties. These ratio of distribution of expenses amongst various selling sh....
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....penses were not incurred wholly and exclusively in connection with transfer of shares of LICMF-AMC by the assessee and nexus of the services rendered by these professionals with the transfer/sale of shares of LICMF-AMC to Nomura could not be proved as the invoices raised by these professionals/advisor does not specify the purposes for which these services were rendered . Thus, the main bone of contention of the Revenue is that these expenses were not incurred wholly and exclusively in connection with transfer/sale of shares of LICMF-AMC by the assessee to Nomura and also nexus with transfer/sale of shares could not be proved. It is also the allegation of Revenue that these professionals are using codenames for the assignment executed by them wherein it is not clearly emanating as to the purposes for which services were rendered as invoices could not be co-related to this assignment of induction of strategic investment in LICMF-AMC and consequently sale of shares by selling shareholders in favour of Nomura. It is also alleged by Revenue that the invoices raised by these professionals do not bore the details of services rendered by these professionals. Before we proceed further, it i....
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....of the 1961 Act to issue summons/notices to relevant professionals/advisors or to consortium parties to unearth and unravel the truth. As we will see later in this order that the assessee on its part has placed all necessary and relevant documents/evidences viz. agreements, invoices , correspondences etc to substantiate on its part that these expenses/costs by way of fees/expenses paid to these legal and financial professionals/advisors were incurred in relation to the transaction of induction of Nomura as new strategic investor in LICMF-AMC and consequent divestment by selling shareholders including assessee of their shareholding in LICMF-AMC in favour of Nomura . Paper Book containing 254 pages speaks volume about the sincere efforts made by assessee in explaining its contentions before the authorities below but to no avail. Now it is time for us to see what all documents/evidences did the assessee produced before the authorities below to support its contentions and are they sufficient to discharge onus caste on the assessee by an Act of 1961 to take it out of liability which was sought to be fastened by Revenue within provisions of the 1961 Act , which are as under: a) The as....
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....ortfolio Managers regulation for a change of status and constitution of LIC Mutual Fund Asset Management Company Limited pursuant to transaction, approval of FIPB, if applicable and approval of RBI which is required to be obtained . It also refers to change of name of LIC Mutual Fund Asset Management Company Limited to LIC Nomura Mutual Fund Asset Management Company Limited. This agreement also speaks of valuation certificate issued by a Chartered Accountant certifying fair valuation of shares in accordance with guidelines issued by RBI for Foreign Direct Investment in equity shares of LIC Mutual Fund Asset Management Company Limited which is delivered by LIC Mutual Fund Asset Management Company Limited to Nomura. It also refers to an opinion issued by legal advisors of LIC Mutual Fund Asset Management Company Limited and selling shareholders being delivered to Nomura. Similarly, it speaks of Nomura having delivered relevant Resolutions authorising this transaction. It also speaks of first business plan being approved by Nomura. It also speaks of due diligence investigations being undertaken by Nomura of LIC Mutual Fund Asset Management Company Limited. It also laid down road map a....
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....ayable to these legal and financial professionals/advisors in connection with sale of shares of LIC Mutual Fund Assets Management Co. Limited and LIC Mutual Fund Trustee Co. Private Limited to Nomura. c) At page 171-173/pb is a letter dated 13-04-2011 written by LIC Nomura Mutual Fund Asset Management Co. Limited to the assessee in connection with sharing of costs amongst selling shareholders as per contractual obligation under SATA and SPA. Reference was drawn in this letter itself to clause 10.3 of SATA and SPA with respect to sharing of cost towards fees/expenses of these legal and financial professionals/advisors amongst selling shareholders under consortium arrangement. It determined the total sales consideration with respect to LICMF-AMC accruing to the selling shareholders under consortium agreement to the tune of Rs. 308.02 crores and the total costs incurred towards professional fees/expenses which was paid by LIC Mutual Fund Asset Management Company Private Limited to the tune of Rs. 3.31 crores to these legal and financial professionas and the assessee share in accordance with clause 10.3 of SATA and SPA was worked out at Rs. 96,73,108/- and finally request was made t....
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....tter dated 21.01.2009 written by PWC to LIC Asset Management Co. to provide lead advisory services for the divestment of minority stake in LIC Asset Management Company. It speaks of the proposed transaction of inducting strategic investor through a divestment/issuance of shares of a minority stake in LIC Asset Management Company Limited and interest of PWC to act as lead advisors to the aforesaid transaction. It speaks of the PWC being retained for this proposed transaction and summarises their understanding of the engagement , scope of work and professional fee for said services. The scope of work at para 4 refers to engagement as lead advisor to completion of the envisaged transaction in the capacity of exclusive lead advisors for inducting strategic investor in LICMF-AMC. The scope of work included arriving at a fair valuation of shares of LICMF-AMC which will entail reviewing management projections , reviewing audited financial statements and then arriving at a fair valuation of the business. The scope of work also included planning and communication with investor which will include assisting LICMF-AMC in preparing Information Memorandum and also assisting in communication and ....
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....bdquo;Amarchand &Mangaldas & Suresh A Shroff & Co‟. are concerned. g) At page 213-226 is placed letter dated 11.01.2011 written by „Amarchand & Mangaldas & Suresh A Shroff & Co.‟ which is written to LIC Mutual Fund Trustee Company Limited , LIC, LICHFL, the assessee and LICHFL Care Homes Limited and Nomura, confirming that said „Amarchand & Mangaldas & Suresh A Shroff & Co.‟ acted as legal advisors to LIC Mutual Fund Trustee Company Private Limited and also legal advisors on behalf of LIC, LICHFL, Carehomes and the assessee, in relation to the investment made by Nomura by way of share purchase in the company pursuant to various agreements and letters as set out in the annexure hereto. It also stipulates that LICHFL, the assessee and Carehomes were selling their shares to Nomura. h) At page 227-232/pb is placed valuation report dated 24-7-2010 issued by „Chaturvedi and Company‟ valuing shares of LIC Mutual Fund Asset Management Company Limited as on 31st March 2010. i) At page 233-234/pb are placed two RBI approvals both dated 24-05-2010 approving the proposed transaction for acquisition by Nomura Asset Management Strategic Investme....
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....cial services sector. It is to be understood that induction of new strategic investor either through divestment of existing shareholders or through issuance of fresh shares involves several steps , inter-alia, including identifying the value of shares of the investee company. It is to be understood that the price/valuation of block of shares which is to be offered to strategic investor either by way of divestment of existing shares or by way of issue of fresh shares depends upon inter-play of several complex factors and need not necessarily be a prices of shares prevailing on bourses but several other consideration weighs for arriving at price of block of shares such as intrinsic worth, present value of assets, future growth potential, premium which management or incoming strategic investor commands, controlling premium etc.. The process of identifying a strategic investor who has synergies with the investee company and who can add significant value in the growth of investee company in itself is a highly complex task which need professional skills and experience apart from discovering the true value of shares which itself is a complex task. The regulatory authorities such as SEBI h....
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....ersed and specialises in these type of strategic disinvestments and capital/money market transactions also gave assistance to management in identifying and thereafter complying with various applicable laws, rules and regulations and also help in identifying and seeking several regulatory clearances/approvals from authorities which are required to be obtained from various agencies in order to ensure that transactions are successfully concluded which is compliant of law. The assessee is a listed company whose shares are listed on Bourses and the assessee was strategic investor in LICMF-AMC while Nomura is a non resident entity who came in as strategic investor by acquiring stake from selling shareholders including assessee under consortium agreements viz. SATA and SPA . This transaction of acquisition under factual matrix of the case could possibly required several laws to be complied with such as Securities Laws, SCRA, SEBI Act etc, , Compliances under Companies Act, 1956, compliances of regulations and rules of stock exchanges, compliances and approvals from Reserve Bank of India under FEMA and applicable regulations for selling shares to Non Resident entity, clearances from Foreig....
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....ation by the contracting parties for breach of confidentiality. Thus, mere use of code name by these professionals to the assignment or non mentioning of the exact services in the invoices cannot be cause of blame as these professionals are bound to maintain secrecy and confidentiality of the assignment awarded to them w.r.t. induction of strategic investor and divestment of the stake by existing shareholders and code name can also be given for administrative convenience. On the other hand if the details are openly divulged in correspondences or in invoices concerning induction of strategic investor or divestment by existing stakeholder will bear the risk of leakages of price sensitive information and breach of confidentiality which could have wide ranging serious adverse ramifications for the assessee as well for these professionals. What is relevant to be seen is that whether these expenses towards professional fees / expenses paid to these professionals by consortium parties are in connection with the assignment of induction of strategic investor in LICMF-AMC and consequently sale of shares by the selling shareholders including assessee whether or not the project name was coded ....
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....) or summons u/s 131 of the 1961 Act to these professionals or to consortium parties to unearth truth and we are afraid that now at this stage no more opportunity can be provided to the Revenue to re-start the exercise of denovo assessment and to burden the assessee with one more round of litigation which is not warranted at this stage more-so sufficient material/evidences by way of agreements, invoices , correspondences etc are already brought on record by the assessee which is speaking loudly that these payments were towards the fee/expenses paid to these legal professionals and financial advisors for handling the task of induction of strategic investor in LICMF-AMC and consequently exit of assessee as shareholder of LICMF-AMC wherein assessee sold its shares to Nomura while the case of revenue is built on suspicion . The parties to sale of shares to Nomura acted as consortium parties and they have vide SATA and SPA agreements both dated 11-07-2009 , clause 10.3 in both these agreements agreed to share the cost of these professionals which falls within arena of their contractual obligation. There is no dispute as to the inter-se agreement between consortium parties to share these....
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....case of the Revenue that no payments were made by assessee and the bogus claim is set up by the assessee. In our considered view keeping in view factual matrix of the case as is emanating from records before us, the assessee has duly discharged its burden cast under provisions of 1961 Act by producing all relevant evidences to substantiate its claim that the payments were made towards share of cost which the assessee was obligated under an agreement to pay towards fees/expenses of these legal and financial professionals and advisors for rendering services in connection with transaction of induction of Nomura as strategic investor in LICMF and consequently complete exit of assessee by way of sale of its shareholding in LICMF AMC to Nomura and we also hold that these services are inextricably linked to aforesaid sale of shares by assessee to Nomura and these expenses are wholly and exclusively incurred in relation to transfer/sale of shares by assessee to Nomura which satisfied the mandate of Section 48 of the 1961 Act as transfer/sale of shares of LICMF-AMC by assessee to Nomura which is compliant with all applicable laws, rules and regulations could not have been possible without t....