2025 (7) TMI 903

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of Income Tax (International Transaction) Delhi-1 [CIT] under Section 264 of the Income Tax Act, 1961 [the Act]. 2. The Petitioner [BCSAL] is a company incorporated under the laws of Singapore and is a tax resident of the said country. The Petitioner proposes to purchase shares of an Indian company, Bray Controls India Pvt. Ltd. [BIND] from its affiliate, Bray International Inc [BII], which is incorporated under laws of the United States of America and is a tax resident of that country. In this context, the Petitioner had submitted an application seeking issuance of a Nil withholding tax certificate under Section 195(2) of the Act. The Petitioner also furnished (i) the audited financial statement of BIND for the last 3 (three) Assessment ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... sought on the basis that the proposed transaction results in a loss; therefore, the same would not involve any liability to pay tax. 6. The Petitioner filed a Petition under Section 264 of the Act seeking revision of the order dated 09.06.2021, whereby the AO had rejected the Petitioner's request for a Nil withholding tax certificate. The learned CIT accepted that the Petitioner was not claiming any treaty benefits. However, it found no fault with the AO's conclusion to decline the Nil withholding tax certificate as sought by the Petitioner. The learned CIT reasoned that the Petitioner had not submitted any valuation report as to the value of the shares on the date when the same were acquired. The learned CIT noted that the shares were ac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e been issued to it. However as per the order of the AO, the assessee neither furnished valuation report at the time of purchase of share of BIND nor furnished financials of seller (BII) and purchaser (BCSAL). The valuation report submitted at the time of original proceedings indicating fair market value of the shares of BIND at the time of selling pertained to F.Y 2020-21 which was not relevant as the valuation report was required for the year of purchase of shares and year of proposed sale of shares by the assessee. Further, in response to Notice u/s 264 of the Act, the assessee has filed latest valuation report dated 02.12.2022. However, as per reports of the Range Head and the AO, on perusal of latest valuation report of shares of "BIND....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eport of share pertaining to 2022-23, has been filed by the applicant in the application u/s 264 of the Act as were filed by the assessee during the proceedings u/s 195 of the Act before the AO. In view of the reports of the Range Head and the AO and the material on record, after considering the submissions of the assessee, the application of the assessee u/s 264 of the Act is rejected." 7. It is material to note that the only aspects which were required to be considered by the AO for considering the Petitioner's Application for a Nil withholding tax certificate, are the value of the shares at which they are proposed to be transacted and whether the same would result in any capital gains. 8. For the purposes of Section 50CA of the Act, it....