Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 853 - ITAT CHENNAIRevision u/s 263 by CIT - buy back of shares from its own holding company - deemed dividend under section 2(22)(d) - dividend distribution tax u/s 115-O - HELD THAT:- Assessee bought back the shares from its holding company a Singapore incorporated entity. The consideration of buy-back was met out of general reserves and surplus. The payment so made was to be considered as distribution of accumulated profits to its holding company on the reduction of capital of the assessee company as envisaged in Sec. 2(22)(d). Accordingly, the assessee was liable to pay tax on distributed profits u/s 115-O besides payment of interest u/s 115P. Further, the excess consideration received by the holding company was to be treated as ‘capital gains’ and the assessee was to be treated as representative assessee of its holding company in terms of Sec. 160 & 163 of the Act to pay the tax in respect of the above gains. Since, the assessment was completed without proper enquiry and non-application of mind, the order was erroneous and prejudicial to the interest of the revenue. Undisputed position that emerges is that the issue which has been racked up by Ld. Pr. CIT in the impugned order was never the subject matter of examination either by Ld. TPO or by Ld. AO during the course of regular assessment proceedings. The queries raised by lower authorities during the course of regular assessment proceedings and the assessee’s replies thereto do not address the issue as highlighted by Ld. Pr. CIT in the impugned order. CIT has flagged a pertinent issue and fully justified as to how the assessment order was erroneous as well as prejudicial to the interest of the revenue. Upon perusal of assessment orders, we find that this issue was never delved into by Ld. AO or Ld. TPO and there was complete non-application of mind on the sated issue. This being so, the observation made by Ld. Pr. CIT in the impugned order could not be faulted with. The revision jurisdiction is perfectly valid and justified. The case laws as cited by Ld. Pr. CIT in the impugned order clearly support his view. However, our aforesaid view would not be construed as expression on the merits of the case, in any manner. - Decided against assessee.
|