TaxTMI 
TaxTMI 
2026 (1) TMI 542
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....case of the Assessee was reopened u/s. 147 of the Income Tax Act as the Assessee had invested a sum of Rs. 13,20,00,000/-by way of purchase of shares in the Indian company, M/s. Humanetics Innovative Solutions India Private Limited during the financial year 2018-19 relevant to Assessment Year 2019-20. The issue involved is that the Assessee had invested in the above Indian company and therefore in order to ascertain the genuineness of the entire transactions summons u/s. 131 were issued to the Directors of the said Indian entity which was returned unserved with a remark incomplete address. In view of the above once again notice u/s. 142(1) was issued to the Assessee with a direction to furnish a copy of the Foreign Currency Gross Provisional Return [ FC- GPR] as required by the Foreign Direct Investment. Nobody filed any reply and therefore the Ld. Assessing Officer decided the issue as per information available on record and made an addition of Rs. 13,20,00,000/- in a show cause notice invoking the provisions of section 69 of the Income Tax Act. As the Assessee is a foreign resident, draft Assessment Order was passed on 29.03.2024. 4. Aggrieved by the draft Assessment Order, th....
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....erve Bank of India in respect of allotment of 1,63,265 equity shares wherein the share allotment was made on 30.05.2018, certificate issued by a practicing company secretary certifying that Indian entity has issued 5,10,204 equity shares on 17.07.2018, board resolution and other filings made by Indian entity before the Reserve Bank of India in respect of allotment made to the assessee, register of members of Indian entity wherein the share allotment stated above in 2 trenches are shown along with initial allotment of equity shares at the time of incorporation of Indian entity, share certificate for share allotment issued by Indian entity along with payment of stamp duty certificate on 30.07.2018, bank statement of Netherland bank account of the Assessee evidencing the relevant transactions for share allotment on 27.03.2018 and 06.06.2018 respectively, foreign inward remittance certificate dated 14 May 2018 and Foreign Inward Remittance Certificates dated 10.07.2018 evidencing the remittances made by the Assessee for share allotment, corporate income tax return of the Assessee for the calendar year 2018 along with the financial statements for the above calendar year prepared and fil....
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....(86 ITD 626) wherein it has been held that if the income is not taxable in the hands of a non-resident taxpayer under section 5 (2) of the act, that same cannot be held taxable in view of provisions of section 69 of the Income Tax Act. 10. The Ld. Departmental Representative vehemently submitted and supported the orders of the Ld. lower authorities. On the issue of the taxability u/s. 69 in the hands of a non-resident entity he submitted that there is no provision in the Act which says that the addition u/s. 69 of the act cannot be made in the hands of a non-resident entity. He submitted that these are the deeming provisions which should be given full effect to. 11. We have carefully considered the rival contention and perused the orders of the Ld. lower authorities. The facts clearly show that Assessee is a non-resident entity based at Netherland. It is a subsidiary of US Company. It has a subsidiary in India. The facts show that during the year under consideration the Assessee Company had invested an amount of Rs. 13,20,00,000/- by way of subscription to the share capital of the Indian company M/s. Humanetics Innovative Solutions India Private Limited. As the Assessee did n....
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....3.2018. However, the shares on right basis were issued in next financial year. The said certificate in form No. SH-1 does not contain date of those certificates. Therefore, he held that until and unless the source of income is proved for these investments, the addition made by the Assessing Officer holds good. Therefore, the assessment was made making the above addition. 14. We find that the assessee has produced overwhelming evidence with respect to the sources of investment made by the assessee. The Assessee has made investment on 06.06.2018. On11 May 2018, the Assessee received transfer of funds from its US entity. Further on 27.03.2018, the investment was made in an Indian entity, and the funds were received from its foreign holding company. The annual accounts of the assessee prepared in Euros was also produced wherein it apparently shows that the paid-up capital and called up share capital of the Assessee is EUR 18,000, the share premium is EUR 1,73,30,453. Therefore, the Assessee has shown the sources of funds also. When the source of the fund, capacity of the assessee is shown coupled with the bank statement, foreign inward remittance certificates, approval of the reserv....