2023 (5) TMI 224

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....d 06.04.2023 and a notice under Section 148 of the Income-Tax Act, dated 06.04.2023. 2. The main grounds put forth by the petitioner assailing the aforesaid proceedings are that (i) there is no liability to tax in respect of the transaction of buyout of shares of S.V.Global Mills Limited consequent upon the order of Apex Court dated 25.02.2019, (ii) the interest received on the aforesaid amount is proposed to be offered to tax in assessment year (AY) 2023 - 24 only whereas it ought to have been offered in AY 2019-20 and (iii) the issues in (i) and (ii) were not put to it for response in the notice under Section 148A(b) of the Act. 3. The petitioner is a private limited company and litigation involving the petitioner and five other ent....

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.... which we are informed is no longer the subject matter of any attachment, and are free to be sold, should be purchased by Respondent No.7 at the price of Rs.100 Crores, to be paid by Mr. Kapil Sibal's client within a period of 9 months from today. As a result of this share purchase of Rs. 100 Crores being ordered by this Court, we make it clear that there will be no triggering of the SEBI Takeover Regulations. We also make it clear that this order does not amount to shares being transferred inter vivos, nor can the payment for the shares be treated as deemed dividend. On payment, the share capital of the Company shall stand reduced by virtue of our order. The observations of the High Court will not bind in any oth....

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.... Holdings Pvt Ltd (840000 shares) 3.M/s.Rajat Chakra Credit and Holdings Pvt Ltd (840000 shares) 4.M/s.Sheetala Credit and Holdings Pvt Ltd (850000 shares) 5.M/s.Twentieth Century Apco Leasing Pvt Ltd(288440 shares) 6.Smt. Rajalakshmi (578000 shares) The Hon'ble Supreme Court directed that a sum of Rs.100 crores to be paid to the above entities for the buy-out of all their shares in the company. Further, the Hon'ble Supreme Court vide order dated 25.02.2019 directed M/s.SV Global Mills Ltd to deposit Rs.100 cores in the registry of Hon'ble Supreme Court within a period of two weeks and registry to invest the said amount in an interest bearing short term fixed deposit. It is o....

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....d the view that the interest thereupon is liable to tax in AY 2019-20. 10. The argument of the petitioner revolves around the interpretation of Section 56(2)(x) to state that the amount of Rs.18.62 crores (approx) would not attract the rigour of the statutory provision. According to it Section 56(2)(x) only relates to a sum of money received without consideration, but in the present case, the consideration has been in the form of shares. It also confirms that the interest income is proposed to be offered to tax in AY 2023-24. 11. In the impugned order dated 21.03.2023, the assessing authority has rightly concluded that there is no capital gains that arises from the transaction since the entire transaction was a buyout of shares by vir....