TaxTMI 
TaxTMI 
2023 (5) TMI 1036
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....d no.36 of Revenue's appeal was recalled for fresh adjudication. 04. In MA no.114/Mum/2021, is in ITA No 7299/ Mum/2017, the co-ordinate bench held that assessee has raised an additional ground no.6 that remains to be adjudicated. Accordingly, the co-ordinate Bench recalled the order for adjudicating the additional ground no.6. 05. Thus, In ITA No. 136/Mum/2017, only issue is to adjudicate ground no.36 of the appeal of learned Dy. Commissioner of Income Tax, large taxpayer unit-2, Mumbai in which is as under:- "On the facts and circumstances of the case and law, the Ld. CIT(A) has erred in excluding the comparable M/s Axis Integrated Systems Limited without appreciating the fact that Business Support Services and Management Services are highly skill-based services and by no stretch of imagination BSS and MSS can be treated as low-end services." 06. At the time of hearing both the parties were heard and both the parties pointed out that this comparable was considered by the co-ordinate Bench in earlier years in ITA No.1547/Mum/2016 for A.Y. 2010-11, ITA No.2733/Mum/2017 for A.Y. 2011-12 and ITA No.5842/Mum/2017 for A.Y. 2012-13 vide order dated 28th September, 2018....
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....liance Industrial Investments and Holdings Ltd ('RIIHL). which was inadvertently not claimed in the Return of Income on erroneous understanding that the said transaction was not a 'transfer' under section 47(iv) of the Income Tax Act 1961 (Act), though relevant conditions specified in section 47(iv) were not fulfilled. The appellant submits that the loss on sale of said shares was allowable under section 45 of the Act as the whole of share capital of its subsidiary company M/s. RIIHL was not held by the appellant and hence the sale of equity and preference shares was not covered by the exception under section 47(iv) of the Act. Your Appellant reserves the right to add, amend, alter or vary all or any of the above grounds of appeal as they or their representatives may think fit." 011. According to ground no.6, the assessee claims and submits that i. Assessee has incurred long term capital loss arising on sale of equity and preference shares of M/s. Reliance Exploration and Production DMCC (REP DMCC), to its subsidiary company M/s. Reliance Industrial Investments and Holdings Ltd ('RIIHL), Which was claimed as exempt u/s 47 (iv) of the Ac....
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....reference shares Purchase value (In Rupees) Purchase price per preference shares (In Rupees) 31/3/2008 4,99,089 552,65,15,382 11,073.21 31/3/2009 6,03,411 838,70,01,286 13,899.32 31/3/ 2009 52,816 73,41,06,372 13,899.32 31/3/2010 5,45,000 658,46,95,319 12,082.01 31/3/2011 3,62,000 439,65,58,448 12,145.19 25/9/2011 4,20,000 557,90,89,332 13,283.55 Total 24,82,316 3,120,79,66,139 vii. Thus, as on 31st March, 2012, assessee was holding a. 24,82,316 5% noncumulative compulsorily convertible preference shares at a total cost of Rs. 31,207,966,139/-, and b. 176,200 equity shares at total cost of Rs.210,84,30,198/- viii. Reliance exploration and production DMCC purchased and cancelled 11,02,500 5% noncumulative compulsorily convertible preference shares of AED 1000/- each at par aggregating US$ 30 crores (AED 110,25,00,000) as per board resolution and shareholder resolution dated 17 July 2012. ix. Thus, assessee was left with 13,79,816 5% noncumulative compu....
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....Reliance Industrial Investment and Holding company as on 31 March 2013. It was shown that this company i. has 14,75,04,400 equity shares of Rs.10 each fully paid up amounting to Rs.14750 lacs held by Reliance Industries Ltd along with its six nominees. Each of the six nominees held 100 equity shares each and Reliance Industries Ltd held 14,75,03,800 equity share of the above company. Thus, Reliance Industry Ltd along with its six nominees was holding 14,75,04,400 equity shares of Reliance industrial investments and Holdings Ltd. Thus, Reliance Industries Ltd. held 100% equity of this company i.e. Reliance Industrial Investment and Holdings Ltd. ii. It has issued two different types of preference shares. iii. As on 31st of March 2012, it had issued 14,57,250 9% noncumulative optional convertible preference shares. These were held by following entities as under:- Preference Share Holding Pattern Of 9% Noncumulative Optionally Convertible Preference Shares serial number Name of the shareholder Number of shares held as at 31/3/2012 As at 31 three 2013 1 Reliance Petro investments Ltd 9,00,500 9,00,500 2 ....
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....The holding of preference share capital by other entities does not exclude the Reliance Investment and Holdings Ltd from the definition of subsidiary company. 019. We have carefully considered the rival contention and perused the details produced before us. According to section 47 of the income tax act, the provision of section 45 does not apply to certain specified transfer. According to clause (iv) of section 47of The Act, it is provided that if there is a transfer of a capital asset by a company to its an Indian subsidiary company, and parent company along with its nominees, hold the whole of the share capital of the subsidiary company, then, transfer of such capital asset shall not be chargeable to tax under the head capital gain in terms of provisions of section 45 of The Income Tax Act. 020. Undisputedly, in case before us there is a transfer of a capital asset by assessee to its subsidiary company, which is also an Indian company. Thus, there is no dispute that Reliance industrial investments holding company Ltd is a subsidiary company of reliance industries Ltd. The only dispute is that Reliance Industries Ltd, Assessee does not hold the whole of the share capital of ....
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....rial Investment and Holdings Ltd is an Indian company as provided under Section 2(26) of the Act, as it was formed and registered under the Companies Act 1956 of the Act. 029. Reliance Industries Ltd, assessee, holds undisputedly 100% equity share capital of Reliance Industrial Investment And Holdings Ltd. However, Reliance Industrial Investment and Holdings Ltd has issued two different types of non-cumulative optionally convertible preference shares of Rs.10 each fully paid up. Balance sheet of the Reliance Industrial Investment and Holdings Ltd. was produced and it was shown that it has 14,57,250, 9% non cumulative optional convertible preference shares of Rs.10 each fully paid up which are redeemable at the end of 7 years from the date of allotment at a price of Rs.2,000/- per share. It was submitted that 96.55% of the shares as on 31st march, two different companies namely Reliance Retail Finance Ltd and Reliance Petro Investments Ltd. hold those shares. Further, Reliance Industrial Investment and holdings Ltd has issued 1,49,020/-, 10% non-cumulative convertible preference shares of Rs.10 each fully paid up which are held by Reliance polyolefin Limited. It has also issued 1....
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....ncome tax Act does not contain any definition of share capital. The Companies Act 2013 also does not define it. The Companies Act, 2013 as per section 2 (84) defines 'share' means a share in the share capital of a company and includes stock. Chapter IV of The Companies Act, 2013 deals with the provisions of ' Share capital' of the company. Section 42 of The Companies Act, 2013 provides that share capital of a company limited by shares shall be of two kinds (1) equity share capital with voting rights or with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed, (2) preference share capital. The explanation (i) and (ii) to that section defines what is equity share capital and what is preference share capital. The companies (share capital and debentures) Rules ,2014 provides for conditions for issue of certain shares. Thus, it is apparent that the equity share capital could be with voting rights or with differential rights as to dividend, voting or otherwise as provided under rule 4 of the rules. Similarly, preferential share capital carries a preferential right with respect to payment of dividend and for prepayment....