TaxTMI 
TaxTMI 
2025 (10) TMI 468
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....nder: "1:0 Draft assessment order is bad in law, non- est, invalid and void ab initio 1:1 The learned ACIT erred in passing draft assessment order under section 144C(1) read with section 143(3) of the Act even though no variation in the income or loss returned by the assessee is proposed in the draft assessment order. 2:0 The Ld. AO erred in denying the benefit of the lower tax rate as per the Double Tax Avoidance Agreement entered into and subsisting between India and Cyprus ('DTAA') by considering the assessee as not the beneficial owner and a mere conduit company 2:1 The Ld. AO has, vide draft assessment order dated 26 December 2017 passed under section 144C(1) r.w.s 143(3) of the Act, denied t....
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....nsolvent. 5:0 Initiation of penalty proceedings under section 271(1)(c) of the Act 5:1 The learned AO/TPO/ DRP has erred, both in laws and on facts, in initiating penalty proceedings under section 271(1)(c) of the act against the Appellant." 3. None appeared on behalf of the assessee. We find from the records that that initially the case was being represented by one or the other representatives of the assessee and the case was adjourned for eleven time on the written request of the representatives of the assessee. Further, we find that since last eight occasions, there is no representation from the assessee side. We therefore decided to proceed ahead with the appeal with the assistance of the ld DR and materials on reco....
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....purpose of obtaining Treaty benefits. It was also asked to provide following additional details: "(a) Is the company engaged in substantial business operation in the state (Cyprus) where it is a resident and the relief which is been claimed from the other state (India) is with respect to Income which is connected to such operations. Details of all the investments date wise made by the company during the relevant financial year in India and abroad. (b) Details whether its principal class of shares are listed on the recognized stock exchange in the contracting state (Cyprus) or if it is owned by company which is resident of such state (Cyprus)or any other state then the details whether its shares are listed in recognized sto....
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....e its incorporation and that too in AY 2013-14 in APEPL which is further an AE of the assessee company. Besides this one investment, the company has not made any investment either in India or abroad during the relevant year. It clearly shows that the main intent of the assessee was to avail treaty benefits. 8. Further, with regard to the details of whether its shares or the shares of its shareholding company i.e. IL&FS India Realty Fund II LLC (IIRF II) are registered in any recognized stock exchange in Cyprus or in any other state. The assessee stated that: "the assessee is a private limited liability company registered under Cyprus Companies Law, CAP-113. It shares are owned by IL&FS India Realty Fund II LLC (IIRF II) a Maurit....
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....h can also be agreed on and included. Other restriction on transfer of ownership can be included the shareholders agreement including an obligation for employee shareholders to sell their shares in the event that a key shareholder become disabled and is no longer able to work or provide the appropriate support to the business, the insolvency of a shareholder or upon retirement or termination as an employee of the business. (iii) It decides on the method of valuing the business / shares of the company. (iv) It describes how the company is going to be run. (v) It defines the duties and responsibilities of its shareholders (vi) It ensures how the minority shareholders are protected. te (vii) It deci....
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....is 100% subsidiary of IL&FS India Realty Fund II LLC (IIRF II) company. In the absence of shareholders agreement between the assessee company and its holding company, the contention of the assessee that it is the beneficial owner of the interest income cannot be accepted. 11. Further, the Assessing Officer observed that the assessee has admitted vide its submission dated 10.11.2017 at point no. 10 that "the shareholder of the assessee which is IIRF II is the beneficial owner of the interest income earned on CCDs. It assumes all the attributes of ownership namely use, enjoyments, risk and control." Since here the assessee company has admitted in its submission that the shareholder of the assessee i.e. IL&FS India Realty Fund II LLC (IIRF ....