2024 (1) TMI 71

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....the Assessment Year 2017-18, the appellant / assessee has preferred the aforesaid Tax Case Appeal before this court. 2. Through the present miscellaneous petition, the appellant has sought for an order of interim stay of all the recovery proceedings initiated by the respondent, pursuant to the impugned order dated 13.09.2023 passed by the Tribunal and consequential notices dated 15.09.2023 issued by the Assistant Commissioner of Income Tax, Central Circle (1), Chennai under section 226(3) of the Income Tax Act, 1961 (hereinafter shortly referred to as "Act") on HDFC Bank Ltd and Bajaj Finance Ltd, pending disposal of the tax case appeal. 3. The principal contention of the learned senior counsel appearing for the appellant / assessee i....

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....: (i)The appellant has already deposited Rs. 898 crores (which amounts to 27% of the alleged tax demand) (ii)As per the order of the learned Judge dated 03.04.2018, the appellant has paid a sum of Rs. 495 crores by way of cash to the respondent (which amounts to 15% of the alleged tax demand) (iii)An amount of Rs. 2956 crores stands deposited and invested in the form of fixed deposit receipts (which amounts to 86% of the alleged tax demand) with HDFC Bank Ltd and Bajaj Finance Ltd, on which the department has raised lien. Thus, Rs. 4349 crores is secured and collected by the Revenue as against the principal tax demand of Rs. 3301 crores; and Rs. 1048 crores in excess is also readily available with them. 5. C....

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....spective banks. Therefore, the learned senior counsel prayed for appropriate orders to lift the lien and release the fixed deposits, so as to enable the appellant / assessee to utilise the funds for its business operation, besides protecting them from the recovery proceedings. 6. On the other hand, the learned senior counsel appearing for the respondent / Revenue submitted that in the assessment year 2013-14, in order to avoid payment of tax, the appellant had distributed its accumulated profits through buyback of shares, thereby triggering section 77A of the Companies Act, 1956 and the same was done just prior to the introduction of section 115QA of the Act, being brought into force. It is further submitted that the provisions of sectio....

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.... the corresponding interest liability of Rs. 1743 crores aggregating to Rs. 6101 crores; and as the demand has now been confirmed by the appellate authorities, the Revenue is entitled to liquidate the security and realise the existing tax liabilities. However, they have not taken any recovery action and the lien was created on the fixed deposits only for the purpose of security. Stating so, the learned senior counsel sought to protect the interest of the Revenue, while passing any order in this petition. 8. Heard the rival submissions and perused the materials available on record. 9. Admittedly, the order of assessment dated 29.04.2020 passed under section 115-O of the Act, by the assessing officer relating to the assessment year in q....

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....nal was right in holding that a purchase of shares under section 391 to section 393 of the Companies Act, 1956 is taxable in the hands of the appellant, although it is taxable only as capital gains in the hands of the shareholder under section 46A of the Act? (v)Whether in the facts and circumstances of the case, the Hon'ble Tribunal was correct in law in holding that buyback of shares not covered under section 77A of the Companies Act, 1956/ section 68 of the Companies Act, 2013 amounts to dividend under section 2(22)(a)/ 2(22) (d) of the Act? (vi)Whether in the facts and circumstances of the case, the finding of the Hon'ble Tribunal that the Scheme approved by the Hon'ble High Court is a colourable device int....

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....llate authorities, the appellant /assessee is liable to pay tax demanded by the Assessing Officer and hence, the outstanding demand raised against them, needs to be secured, to protect the interest of the Revenue. It is also submitted that the financial difficulty cited on the side of the appellant has no merit, as their current assets as on 31.03.2022 are around Rs. 21,644 crores. 12. Considering the totality of the facts and circumstances of the case and having regard to the submissions made by the learned counsel appearing on either side, this court, in the interest of both the parties, is inclined to grant an order of interim stay, in the following terms: (i)The appellant / assessee shall make a payment of Rs. 1500 crores in....