TaxTMI 
TaxTMI 
2024 (12) TMI 1178
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....objections raised by the petitioner to re-open the assessment, Impugned Show Cause Notice issued under Section 142(1) of the Income Tax Act, 1961 and the Impugned Scrutiny Notice issued under Section 143(2) of the Income Tax Act, 1961 respectively as detailed below:- W.P.No. Impugned Notice/Show Cause Notice/Communication No. Date Assessment Year 3525 of 2022 DIN & Notice No.ITBA/AST/S/148/2020-21/1032069660(1) and DIN & Letter No.ITBA/AST/F/17/2021-22/1038260207(1) 31.03.2021 2016-2017 3527 of 2022 DIN & Notice No.ITBA/AST/F/142(1)/2021-22/103859260(1) 10.01.2022 2016-17 3528 of 2022 DIN No.ITBA/AST/F/143(2)-4/2021-22/1036928652(1) 15.11.2021 2016-17 3. The dispute in the present case pertains to the Assessment Year 2016- 17 and the Financial Year 2015-16. The petitioner, a non-resident foreign company from Singapore held about 8,57,29,304 shares in an Indian Company, namely, M/s.Sanmina-SCI Technology India Private Limited (STIPL). It sold their shares to M/s.Sanmina-SCI India Private Limited (SIPL) also a group Company on 14.09.2015 for a total value of Rs.216,89,51,391 at Rs.25.30 per share. 4. A Return of Income was filed b....
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.... between India and Singapore, as the DTAA provides that the income would be taxable only in Singapore. The petitioner filed its return of income on 14.10.2016 for the said AY admitting NIL income and disclosing an income of Rs.131,16,58,351 as exempt from taxation. The Assessing Officer issued a Notice under Section 201 of the Act to Sanmina-SCI India Private Limited the company which purchased the share as there was failure on its part to deduct tax at source for the consideration paid by it to the petitioner for acquisition of shares of Sanmina-SCI Technology India Private Limited and after analyzing prima facie the chargeability to tax of such Capital Gains and the submissions of M/s.Sanmina-SCI India Private Limited, the AO had closed the proceedings." 9. It is further submitted that during the course of assessment proceedings of M/s.Sanmina-SCI India Private Limited (SIPL), the transaction was also scrutinized by the Transfer Pricing Study (TPS), who submitted the same to the Office of the Assistant/Deputy Commissioner of Income Tax, Transfer Pricing Officer Circle-3(1), as a part of its submission dated 07.01.2019. No adjustment with receipt to the same was proposed in thi....
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....ng the Valuation Report with Reserve Bank of India." In the beginning also, the report mentions reliance restricted Therefore, it is clear that the above valuation is only for the purpose of the RBI and not for the Income Tax or its suitability and applicability for any other purpose such as for working out the capital gains liability of the remittee (recipient). The valuer has also not independently verified the valuation and relied solely on the documentation provided by the remitter. Therefore when the valuation is carried by the undersigned the same is worked out as per Rule 11UA NAV method as under [100100] Balance Sheet Unless otherwise specified, all monetary values are in INR 31/03/2015 31/03/2014 31/03/2013 Balance Sheet (Abstract) Equity and Liabilities (Abstract) Shareholders' funds (Abstract) Share Capital 127,65,72,300 127,65,72,300 153,25,22,070 Reserves and surplus 258,10,42,300 256,93,00,903 Total shareholders' funds 385,76,14,600 384,58,73,203 ....
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.... is accorded to furnish your objections, if any, as laid down in the case of GKN Driveshafts (India) Ltd. Vs. ITO, (2003) 259 ITR 19 (SC), latest by 22.11.2021. Your objections may please be forwarded to the email id:[email protected] (word format). Please note that if the objections are not received on or before the said date, it will be construed that you have no objections to offer and necessary action will be taken accordingly." 13. The petitioner has replied and pursuant to which, the Impugned Show Cause Notice dated 10.01.2022 under Section 142(1) of the Income Tax Act, 1961 has been issued which is impugned in W.P.No.3527 of 2022. 14. A Speaking Order dated 30.12.2021 was also passed in line with the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts (India) Ltd. Vs. Income Tax Officer and Others, (2003) 259 ITR 19 (SC) (2003) 1 SCC 72, disposing of the objection of the petitioner. Pursuant to the Speaking Order dated 30.12.2021, the Impugned Show Cause Notice dated 10.01.2022 has been issued to the petitioner which has been impugned in W.P.No.3527 of 2022 as mentioned above. 15. The Impugned Show Cause Notice dated 10.01.2022 merely ca....
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....r reopening the assessment, as is evident from the reasons furnished by the respondents for re-opening the assessment in the annexure attached to their response dated 15.11.2021. It is submitted that the shares of the purchasing company namely Sanmina-SCI India Private Limited has been valued to arrive at a incorrect conclusion for income assessment by invoking Rule 11UA of the Income Tax Rules, 1962 under the Net Assessment Valuation (NAV) method. It is submitted that if at all such an exercise is to be carried out, at best the shares of the company, two shares were sold by the petitioner namely Sanmina-SCI Technology India Private Limited (STIPL) ought to have been valued and therefore in absence of the jurisdictional fact that are available, the proceedings initiated vide Impugned Notice dated 31.03.2021 and the consequential order passed on 30.12.2021 overruling the objections of the petitioner is liable to be quashed. 20. The reasons that forthcoming in the affidavit filed in support of the present writ petitions are that there are no fresh and tangible materials that have come in possession of the respondents Department for issuance of the Impugned Notice dated 31.03.2021 ....
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....n 2019 102 taxmann.com 293 (Bombay); (iii) Income Tax Officer, Ward 1(2) Vs. Mohanlal Charmpalal Jain reported in 2019 11 taxmann.com 67 (SC); (iv)Akshar Builders & Developers Vs. Assistant Commissioner of Income Tax - 28(1), Mumbai reported in 2019 103 taxmann.com 162 (Bombay) and (v) Ankita A. Choksey Vs. Income Tax Officer - 19 (1) (1) & Others in W.P.No.3344 of 2018. 26. Arguing the case on behalf of the respondents, the learned Senior Standing Counsel for the respondents would submit that these Writ Petitions are devoid of merits and therefore these Writ Petitions are liable to be dismissed. 27. The learned counsel for the respondent would submit that transactions which are exempted from payment of tax involving cross border transactions have to be examined as there can be a case for income escaping assessment under the provisions of the Income Tax Act, 1961. It is further submitted that only an intimation was made and the assessment was completed only under 143(1) and therefore it cannot be stated that there is no change of opinion. 28. It is submitted that for reopening of the assessment for the purpose of under Section 147 of the Income T....