TaxTMI 
TaxTMI 
2025 (9) TMI 781
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.... in law, the Ld. CIT(A) is correct in deleting the adjustment made by the TPO by relying upon the decision of the Hon'ble Bombay High Court in the case of Vodafone India Services Pvt. Ltd. (368 ITR 1) and Shell India Markets Pvt. Ltd (369 ITR 516) wherein it has been held that the provision of Chapter X of the Act would apply only if the income is chargeable to tax under the Act ignoring the fact that the TPO had not re-characterized the shortfall in the receipt of share premium as income? 2 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in deleting adjustment made by TPO by relying upon the decision of the Hon'ble Bombay High Court in the case of Vodafone when the TPO had only treated the ....
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....nd therefore, proposed to be disallowed by the A.O. 4. Both the above referred issues are raised by the assessee before the Ld.CIT(Appeals) who had discussed the matter at length and after deliberation relying on the judgment of the Vodafone India Services Pvt. Ltd. (368 ITR 1) and Shell India Markets Pvt. Ltd (369 ITR 516)and decided the issue in favour of the assessee observing as follows: "Observations on appellants submission is as follows: 6.1 During FY 2015-16, the Appellant had issued 2.000,000 equity shares to ZT USA at value of 30 per share. The shares were issued basis the valuation report obtained from an independent valuer wherein the value derived basis discounted cashflow method was INR 26.8 per share. ....
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....sed the rectification order dated 21 October 2021 wherein it rejected the ask of the Appellant to rectify the inadvertent levy of the effective corporate tax at 33.06 per cent instead of DDT rate of 20.36 per cent on the disputed additions of INR 6,39,60,000. 6.7 The rationale provided by the learned AO while rejecting the rectification application of the Appellant was that "Addition has been made u/s. 2(22)(e), being deemed dividend and rightly taxed at 33.06%. Therefore, order u/s. 154 of the Act is being passed rejecting the assessee's claim." 6.8 While going through the facts of the case, it is understood the main issue under consideration is in relation to short recovery of premium on issue of equity shares by the....
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....mputation provisions cannot replace/substitute the charging provisions. In fact, in B.C. Srinivasa Shetti (supra), there was charging provision but the computation provision failed and in such a case the Court held that the transaction cannel be brought to tax. The present facts are on a higher pedestal as there is no charging provision to tax issue of shares at premium to a non-resident, then the occasion to invoke the computation provisions does not arise. We, therefore, find no substance in the aforesaid submission made on behalf of the Revenue. As in the present case, the TPO in those cases had made a transfer pricing adjustment by computing a shortfall in share premium received by the Assessee upon issuance of shares to the fo....
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.... 5. Aggrieved with the aforesaid relief provided by the Ld.CIT(Appeals), the revenue has preferred the appeal before the Tribunal with the contention that the Ld.CIT(Appeals) was not correct in deleting the adjustment made by the TPO, relying on the decisions of the Hon'ble High Court of Bombay (supra). 6. At the outset, the Ld. Sr. DR representing the revenue reiterated the facts of the case and vehemently supported the order of the A.O. 7. On the other hand, the Ld. Counsel representing the assessee submitted that the issue is no more res-integra and has been decided by the Hon'ble High Court of Bombay in the cases of Vodafone India Services Pvt. Ltd. (368 ITR 1) and Shell India Markets Pvt. Ltd (369 ITR 516), wherein judgments of ....
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....ited subject, I am directed to draw your attention to the decision of the High Court of Bombay in the case of Vodafone India Services Pvt. Ltd. for AY 2009- 10(WP No.871/2014), wherein the Court has held, inter-alia, that the premium on share issue was on account of o capital account transaction and does not give rise to income and, hence, not liable to transfer pricing adjustment. 2. It is hereby informed that the Board has accepted the decision of the High Court of Bombay in the above mentioned Writ Petition. In view of the acceptance of the above judgment, it is directed that the ratio decidendi of the judgment must be adhered to by the field officers in all cases where this issue is involved. This may also be brought to the not....