TaxTMI 
TaxTMI 
2021 (7) TMI 945
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....s 157598 and Shri Kul Bhushan Sharma was one of its Directors. Assessee company-company acquired PAN from India bearing No. AADCN3458P and started filing its return of income in India since A.Y. 2011-12. Through a share exchange agreement dated 17.04.2008, it became the subsidiary of Indus Gas Ltd. and through a production sharing agreement dated 18.02.2005, i.e. very next day to its incorporation, it became the owner of 25% participating interest in exploration right of RJ-ON/6 Oil block of Rajasthan allotted to M/s. Focus Energy Ltd. 3. Pursuant to search and seizure operation u/s. 132 of the Incometax Act, 1961 ("the Act") conducted on 22.03.2012 in M/s. Focus Energy Group of cases, satisfaction note for invoking the provisions of section 153C of the Act against the assessee was recorded on 18.11.2013 and notice u/s. 153C was issued to the assessee. Assessee filed return of income declaring a loss of Rs. 2,08,79,67,795/- for the assessment year 2011-12 and Rs. 19,89,26,549/- for the assessment year 2012-13. But the Assessing Officer concluded the assessment at nil income for both the years by disallowing the losses claimed by assessee and simultaneously, initiated proceedings u....
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....R places reliance on the orders of the Assessing Officer. Lastly, it was contended that there was no incriminating material found during the search and, therefore, in view of the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla, (2016) 380 ITR 573 (Del), no addition could be made. 6. We have gone through the record in the light of submissions made on either side. It can be seen from the assessment order that the Assessing Officer invoked the provisions of section 6(3) of the Act for bringing to tax the income of the assessee as taxable in India; that the Assessing Officer also invoked the provisions of section 9 of the Act on the ground that during the assessment year 2011-12, the assessee earned profit from companies whose underlying assets were wholly and totally situated in India or otherwise also the revenue was earned only because of underlying assets or source of income is in India; and that as per section 9 of the Act, the income arising on account of profit whose underlying assets are situated in India are to be taxed in India. 7. On the aspect of non-recording of satisfaction that any particular document belonging to the assessee was ....
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.... an Indian Incorporated company, resident in India and were put together, with intermixed, unconnected and unrelated aspects pertaining to the assessee company; that the contents of the seized material were not brought on record translating the same into proper satisfaction note other than just identifying them to utilise for the purpose of reopening the case which was not desirable to be approved. With such observations and finding of facts, Ld. CIT(A) held that there is merit in the contentions of the assessee regarding the unlawful initiation of proceedings under section 153C of the Act. 11. Ld. AR argued before us on the same lines of observations and finding of facts returned by the Ld. CIT(A) and placed reliance on the decisions reported in Pepsi Foods (P.) Ltd.v ACIT [2014] 52 taxmann.com 220 (Delhi) affirmed by the Hon'ble Supreme Court in the case reported in 2017 (12) TMI 588 Supreme Court and Pepsi India Holdings (P) Ltd vs. ACIT (2014) 50 taxmann.com 299 (Delhi) and some other decisions of Bombay and other High Courts. 12. For convenience sake, we refer to the decision of the Hon'ble jurisdictional High Court in the case of Pepsi Foods (P.) Ltd. v ACIT [2014] 52 taxma....
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....issuance of a notice under Section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would not meet the requirement of the concept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of the kind required under Section 153C of the said Act. 12. This being the position the very first step prior to the issuance of a notice under Section153C of the said Act has not been fulfilled. Inasmuch as this condition precedent has not been met, the notices under Section153C are liable to be quashed. It is ordered accordingly. The writ petitions are allowed as above. There shall be no order as to costs. The aforesaid decision of Hon'ble H....
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....e India in accordance with the laws of Cyprus and such location was not challenged. CIT(A) found that the submissions made by the assessee tallied with the information and documents provided by FT & TR, more particularly at paragraph No. 5.9 of such an assessment order. 15. There is no challenge to the observation of the CIT(A) that the assessee is a resident in Cyprus. Learned CIT(A) examined the material available before her in the light of the provisions of section 6(3) of the Act and also the orders passed by TPO in the case of Focus Energy Ltd for the assessment years 2006-07 to 2012-13. All these materials had shown that M/s. Focus Energy Ltd. had international transactions with the assessee. M/s. Focus Energy Ltd. is undisputedly an Indian Company. It is, therefore, inferred that since the transaction between Focus Energy Ltd. with the assessee was accepted as an international transaction continuously over a period of time, it goes without saying that other party, i.e., the assessee is a foreign company. Any transaction between Indian Company and Indian company cannot be an international transaction and therefore, the international transaction of Focus Energy Ltd. which is ....
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....so the corrigendum issued thereafter was challenged. Following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) and a number of other decisions, the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel (supra) quashed the final order of the AO and the demand notice. Interestingly, even as regards the corrigendum issued, the Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. 14. Recently, this Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of Indi [2016] 388 ITR 383 (Del.), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra), the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel, Chennai (supra) as well as the Bombay High Court in International Air Transport Association v. DCIT (2016) 290 CTR (Bom) 46, came to the same conclusion. 15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under Section 144C (1) of the Act would, at best, be....
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....d will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years. The Dispute Resolution Panel Rules have been notified by S. O. No. 2958 (E) dated 20thNovember, 2009. " In the above extracted Para 45.5 there has been an inadvertent error in stating the applicability of the provisions of section 144C inserted vide Finance (No.2) Act, 2009 that amendments will apply in relation to the assessment year 2010- 11 and subsequent assessment years. Accordingly, para 45.5 is replaced with the following: "45.5. Applicability: Section 144C has been inserted with effect from 1stApril, 2009. Accordingly, the Assessing Officer is required to forward a draft assessment order to the eligible assessee, if he proposes to make, on or after the 1stday of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. In other words section 144C is applicable to any order which proposes to make variation in income or loss returned by an eligible assessee, on or after 1st October, 2009 irrespective of the assessment year to which it pertains. Amendments to other sections of the Income-tax Act referred to in para 4....
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....terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person." 2....