No Taxability Arises During Current Year If Taxpayer Has Only Repatriated Amounts Invested In Earlier Years: Delhi ITAT
Pankaj Bajpai
6 Feb 2024 2:39 PM IST
Observing that the assessee has only repatriated the amounts invested in the earlier years and hence, no taxability arises during the year, the Delhi ITAT held that there is no escapement of income in the hands of assessee i.e., a Singaporean entity on repatriating Rs.203.56 Cr. arising from redemption of NCDs where Assessee did not file the ITR.The ITAT Coram comprising Dr. B.R.R....
Observing that the assessee has only repatriated the amounts invested in the earlier years and hence, no taxability arises during the year, the Delhi ITAT held that there is no escapement of income in the hands of assessee i.e., a Singaporean entity on repatriating Rs.203.56 Cr. arising from redemption of NCDs where Assessee did not file the ITR.
The ITAT Coram comprising Dr. B.R.R. Kumar (Accountant Member) and Astha Chandra (Judicial Member) observed that “the assessee has only repatriated the amounts invested in the earlier years and hence, no taxability arises during the year. In the case of the assessee company, neither has any income accrued or arisen or is deemed to accrue or arise under that for the assessment year 2017-18 nor any claim has been under any DTAA”. (Para 5)
As per the brief facts of the case, the Assessee had subscribed in NCDs for Rs.150 Crore in M/s Hindustan Power Projects Pvt Ltd in AY 2014-15 and offered the interest income to tax in AYs 2015-16 and 2016-17. In AY 2017-18, the NCDs were redeemed and the funds were transferred by the Assessee from Deutsche Bank India to J.P Morgan Bank in Singapore for which Assessee obtained Form 15CB and filed Form 15CA. Assessee was thereafter subjected to reassessment citing failure to make a full and true disclosure of the income.
The Coram opined that no income accrued or arose or could be deemed to accrue or arise on redemption of the NCDs and no claim has been made under any DTAA.
The Coram also remarked that the Revenue has not examined the relevant records wherein the interest earned was duly offered to tax.
Thus, the ITAT concluded that there was no escapement of income during the year and hence, the notice under Section 148 is void ab initio and consequently the assessment is a nullity.
Counsel for Appellant/ Taxpayer: Senior Advocate Porus Kaka and Advocates Vishal Kalra Divesh Chawla & Ketan Ved
Counsel for Respondent/ Department: Vizay B. Vasanta
Case Title: BCP V Singapore FVCI P. Ltd Verses ACIT
Case Number: ITA No. 449/Del/2023
