TaxTMI 
TaxTMI 
2019 (5) TMI 906
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.... II, New Delhi (hereafter "the subject property"). 2. The principal controversy in the present case relates to the levy of unearned increase in respect of the subject property. DDA claims that the subject property was transferred in the year 2005-06, as there was a material change in the shareholding of the petitioner. According to DDA, the said change in shareholding brought about the change in the effective control in the subject property, which is construed as a transfer, thereby entitling DDA to levy unearned increase. The petitioner disputes the above and contends that change in the shareholding cannot be construed as a transfer of the subject property. Factual Background 3. M/s Sharpedge Limited (hereafter 'Sharpedge'), a Company incorporated in India, acquired the subject property on 11.06.1974 in an auction conducted by DDA. 4. Sharpedge constructed an industrial building on the subject property after obtaining the necessary approvals of the building plans. Subsequently on 05.07.1978, a perpetual lease deed in respect of the subject property was registered in favour of Sharpedge. 5. On 09.02.1984, the petitioner - then known as Indian Shaving Products Limited (ISPL) -....
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....) before this Court, praying that directions be issued to DDA to provide the basis for arriving at the figure of unearned increase and the interest demanded from the petitioner, vide DDA's notice dated 29.08.1995. On 19.04.2002, the aforementioned application was disposed of by this Court by directing DDA to consider and dispose the representation made by the petitioner. 13. On 29.10.2002, DDA issued a letter (bearing No. F.5(52)73-LSB (Indl) PT) demanding a sum of Rs. 28,00,096/- from the petitioner as interest. 14. On 01.10.2005, the petitioner issued letters to various stock exchanges, informing them about the merger of Aquarium Acquisition Corp.(AAC) a wholly owned subsidiary of Procter & Gamble, USA with the Gillette Company, USA (TGC). It is relevant to note that at the material time, TGC had substantial shareholding in the petitioner. 15. On 10.06.2006, TGC transferred its rights, title and interest in the petitioner company (a total of 41.02% shareholding) to Procter& Gamble, Netherlands, without consideration. The petitioner submits that the same did not trigger an open offer under the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997, since the tra....
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....nversion rates of 2010-2011 and not the conversion rate prevailing in 2007-2008. Further, by the said letter, the DDA had also demanded interest at Rs. 13,876/-. However, the petitioner submits that this communication was never sent to the petitioner. 23. On 23.06.2011, the petitioner paid an amount of Rs. 46,13,472/-, as demanded in terms of the letter dated 30.03.2011, under protest. 24. In August 2011, the petitioner submitted more documents, composition fee of Rs. 81,233/- under protest, additional interest (for the period between 01.04.2011 to 23.06.2011) amounting to Rs. 2,07,235/-under protest, and requested DDA to issue a 'No-Dues Certificate' to the petitioner. On 13.04.2012, DDA called upon the petitioner to submit a board resolution authorizing Mr Amit Vyas to represent the petitioner in the conversion process. 25. On 21.05.2012, the petitioner filed a contempt petition (C.C.P. No. 331 of 2012) alleging willful non-compliance of the orders passed by this court. During the course of the hearing of the said contempt petition, the learned counsel appearing for DDA submitted that as soon as the petitioner submits necessary documents as requisitioned in DDA's letter dated ....
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....r of TGCs shareholding in the petitioner to Procter & Gamble, Netherlands. 35. It is contended on behalf of DDA that unearned increase is payable on the said transaction in terms of the lease deed. Reliance in this regard is placed on Clause 4 of the lease deed which proscribes the lessee to sell, transfer, assign or otherwise part with the possession of the subject property except with the previous approval of the lessor. Clauses 4 and 5 of the perpetual lease deed dated 05.07.1978, read as under:- "(4) (a) The Lease shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the industrial plot except with the previous in writing of the Lessor which he shall be entitled to refuse in his absolute discretion. Provided that such consent shall not be given for a period of ten years after the commencement of this Lease unless, in the opinion of the Lessor, exceptional circumstances exist for the grant of such consent. Provided Furtherthat in the event of the consent being, the Lessee may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover a portion of the unearned increase in the value i.....
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.... payable on such transfer, which was occasioned in terms of the scheme of amalgamation as approved by BIFR. 37. Concededly, the petitioner has paid the amount of unearned increase due of such transfer. The controversy involved in the present petition does not relate to levy of unearned increase on such transfer but on account of dilution of the share capital of TGC by issue of shares to Procter & Gamble, USA and transfer of certain shares held by TGC in the petitioner company to Procter & Gamble, Netherlands. 38. Pursuant to the Scheme of merger of ACC (which is a group company of a Procter & Gamble) with Gillette, TGC became a subsidiary of Procter & Gamble Company, with effect from 01.10.2005. It is relevant to note that even at that stage, there was no change in the shareholding of the petitioner, since 75.89% of shares of the petitioner continued to be held by TGC (the Gillette Company, USA). It is stated that on 10.06.2006, TGC transferred 41.02% of its shareholding of the petitioner company to Procter & Gamble, Netherlands. It is the DDA's case that with the acquisition of Gillette Company, USA by the Procter & Gamble Company, USA, the subject property stood transferred fro....
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....e owner of any specific fund lying with the Company. A shareholder, a depositor or a director may not therefore be entitled to move a petition for infringement of the rights of the Company, unless by the action impugned by him, his rights are also infringed." 44. In a recent decision of the Supreme Court in Vodafone International Holdings B.V. v. Union of India and Anr.: [2012] 6 SCC 613, the Supreme Court rejected the contention that a transfer of shares of an overseas holding company would amount to transfer of assets held by the subsidiary in India. In the said case, the Supreme Court applied the "look at" test to view the transaction relating to transfer of shares by overseas holding companies. The transaction must be viewed as it looks and a dissecting approach is not warranted. 45. Essentially, DDA seeks to lift the corporate veil of the petitioner in order to establish transfer of assets of the petitioner to the Procter & Gamble Group. Clearly, no grounds for lifting of the corporate veil are established in this case. It is nobody's case that the transaction relating to dilution of equity of TGC in favour of Procter & Gamble, USA by virtue of the merger of AAC with TGC or ....
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.... in conversion charges and Rs. 2,07,235/- as interest on the said differential amount of conversion charges. In terms of the said order, DDA had directed that the Management Wing would review the petitioner's claim for the said amounts, keeping in view that the demand of Rs. 3,94,57,027/- has been dropped and taking into account that a sum of Rs. 20,000/- was payable as balance interest on the unearned increase as on 01.06.2007. 49. The DDA also claims that interest is payable on the amount of Rs. 2,26,55,314/-, being the interest on unearned increase paid by the petitioner. The said amount includes an amount of Rs. 1,98,55,228/- as the interest payable on the unearned increase upto 31.08.1995 and further interest of Rs. 28,00,096/- on the aforesaid amount of interest for the period from 01.09.1995 to 13.02.1996. As against the aforesaid amount, the petitioner has paid a sum of Rs. 10,59,440/- on 13.02.1996, leaving a balance amount of Rs. 2,15,95,884/- which, according to DDA, was payable on 15.02.1996. Out of the aforesaid amount, the petitioner paid a sum of Rs. 2,15,75,884/- on 01.06.2007, leaving a balance of Rs. 20,000/-. Thus, admittedly, the petitioner has not only paid in....