TaxTMI 
TaxTMI 
2024 (9) TMI 147
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....3-14. [5] The brief facts of the case are that the petitioner filed its original return of income declaring total income of Rs. 17,93,76,980/- under normal provisions and Book Profit of Rs. 49,64,29,959/- and claiming Long Term Capital Loss of Rs. 1,73,77,183/- on account of capital reduction of shares in Mastek Asia Pacific Pte. Ltd (MAP). [5.1] The petitioner thereafter filed a revised return for the year under consideration. In view of the assessment order for the Assessment Year 2011-12, the petitioner had withdrawn the Long Term Capital Loss of Rs. 1,73,77,183/- claimed on account of capital reduction in MAP as same was in nature of Long Term Capital loss and instead thereof, claimed Long Term Capital Loss of Rs. 2,01,32,777/- incurred on actual sale of shares of Mastek GmbH for the year under consideration which was disallowed in Assessment Year 2011-12. [5.2] It was also disclosed by the assessee that the capital gain was inclusive of foreign exchange fluctuation gain of Rs. 1,88,72,839/- which was reduced from the total income of the petitioner. [5.3] The petitioner has also filed return of income for the Assessment Year 2016-17 on 30th November, 2016 where the ....
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....which was provided by the respondent on 11th May, 2021. The reasons recorded mainly contained the two issues for reopening of the assessment. The reasons recorded were based upon the audit objections raised by the internal audit party of the respondent department and on the basis of such objections, analysis was done by the Assessing Officer and arrived at the following findings for reopening of assessment: "5. Findings of the AO : In this case, on the basis of above mentioned facts and after proper investigation from the materials on records, it is seen that the TPO had concluded that the guarantee fee has to be determined on the basis of total value of performance guarantee. Accordingly, all contentions raised by the assessee-company was rejected and a guarantee fee @ 2% was determined without prejudice basis at Rs.3.136 crore in relation to performance guarantee extended by the assessee-company on behalf of MSUK. However, no separate adjustment was made as mark-up has been suggested as enterprise level taking value added expenses (VAE) as the basis for mark-up. However, the detailed benchmarking of the VAE in r/o, the provision of marketing support service by the AE-MUK....
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....ried out as below: Particulars Sources Department Computation Audit Computation Risk Bearing Rate Average of bank of America and City Bank rates sourced from Bloomberg A 3.25% 3.25% Forex Risk Rate B 0% 1% Total Risk C [A+B] 3.25% 4.25% Risk Free Rate D 1.71% 1.71% Difference E[C-D] 1.54% 2.54% Risk Premium F [E/C] 47.38% 59.76% Arithmetic mean of PLI of comparable companies before risk adjustment G 22.78% 22.78% Arithmetic mean of PLI of comparable companies after risk adjustment H [G-(G*F)] 11.99% 9.17% As the entire sales consideration was routed through the books of account of the AE and had no role to play in determining the ALP of the marketing support services rendered by the AE to the assessee-company. Thus the ALP in relation to provisions of marketing support service by the AEMUK to the assessee-company can be determined as under: Particulars Actual ALP as per Department ALP as per Audit Revenue 8884 7736 7541 Direct cost 6908 6908 6908 ....
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....o the similar transactions took place in the Assessment Year 2011-12 in case of reduction of capital of Mastek GmbH and the actual sale of shares took place in the year under consideration where the petitioner claimed the actual loss of sale of shares of Mastek GmbH. It was therefore submitted that there is no failure on the part of the petitioner to disclose fully and truly all material facts relevant for the assessment and accordingly, proviso to Section 147 of the Act would apply in the facts of the case as the impugned notice is issued beyond the four years from the end of the relevant assessment year. [7.2] It was further submitted that on both the counts i.e. the petitioner has made full and true disclosure as well as on change of opinion so far as the first reason recorded by the respondent - Assessing Officer, the impugned notice is not tenable and the respondent could not assume the jurisdiction for reopening the assessment for the year under consideration. [7.3] It was further submitted by learned advocate Mr. Soparkar that there is complete non application of mind on the part of the respondent - Assessing Officer inasmuch as the issue of exchange gain on sale of MA....