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TMI Blog2017 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of limitation prescribed under the statute. 3. Without prejudice to the above and in the alternative, the assessment order passed by the learned AO is barred by limitation having been passed beyond the statutory period prescribed under the Act. 4. On the facts and circumstances of the case, the order passed by the learned AO is bad in law and liable to be quashed as the same has been passed without issuance and service of statutory notice under Section 143(2) of the Act. 5. On the facts and circumstances of the case, the learned AO has erred both on facts and in law in framing the assessment under Section 153A of the Act despite the fact that the search on the basis of which assessment has been reopened itself is bad in law. 6. On the facts and circumstances of the case, the learned AOI has erred both on facts and in law in passing the order despite the proceedings initiated under Section 153A and the assessment framed under Section 153A/143(3) are in violation of the statutory conditions and the procedure prescribed under the law. 7. On the facts and circumstances of the case, the learned AO has erred both on facts and in law in going ahead with the assessment under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... economic substance of the transaction, the said transaction shall be considered in the nature of quasi equity and accordingly shall not be bench marked applying rates applicable on commercial loan/loans provided by banks. 17. The assessing officer/DRP erred on facts and in law in not appreciating that the loans were advanced by the assessee out of its own surplus funds kept in the foreign denominated EEFC account, and since the transaction of issue of loan has no bearing on the cost or profits of the assessee, it cannot be considered as an international transaction in term of section 928 of the Act. 18. The assessing officer/DRP erred on facts and in law in not appreciating that the loans were issued by the assessee out of EEFC account which is not entitled for any interest income, and since the transaction of advance of loan has no bearing on the income of the assessee, it cannot be considered as an international transaction under section 928 of the Act. 19. Without prejudice, the assessing officer/DRP erred on facts and in law in disregarding the fact that the loan was advanced by the assessee to its associated enterprise in foreign denominated currency and accordingly, loan a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year under consideration. During the year under assessment, the assessee reported two international transactions i.e. (i) Baba Global (UK) Ltd. of Rs. 39,64,813/-; and (ii) Baba Global (UK) Ltd. for Rs. 2,83,43,030/-. 6. Assessee also advanced foreign currency loan to its subsidiary as under :- Associated Enterprises Amounts of Loan Rate of interest on loan Baba Global Co (FZC) UAE 233429180 Interest free loan Baba Global Co (BD) Ltd. 4118559 Interest free loan Baba Global AG 0 Interest free loan 7. Consequent upon the reference made u/s 92CA(1), the TPO passed order dated 23.12.2013 proposing an adjustment of Rs. 2,96,33,034/- on account of Arms Length Price (ALP) by determining interest income in respect of interest free deemed loan advanced by the assessee company during the FY 2004-05 to its AE. Then draft assessment order was passed. Pursuant to the order passed by the TPO, total income of the assessee assessed at Rs. 2,32,27,933/-. 8. Assessee filed objections u/s 144C before the Dispute Resolution Panel (DRP) who has disposed of the objections vide order dated 24.12.2014. In accordance with the directions issued by DRP, cumulative adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-availability of incriminating materials; that ground relating to presence or absence of incriminating material was never raised before the DRP nor before the AO which are mixed question of fact and law and relied upon the case of Yash Jewellery P. Ltd. vs. DCIT (ITA No.915/Mum/2015 decided on 15.02.2016). 14. Undisputed facts are inter alia that initially return of income was filed by the assessee qua AY 2006-07 declaring loss of Rs. 23,61,299/- on 08.11.2006, which was processed u/s 143 (1) and thereafter assessment was completed u/s 143(3) vide order dated 14.03.2008 determining a loss of Rs. 23,61,299/-; that thereafter search and seizure operation was conducted u/s 132 in case of assessee company as part of DS Group on 21.01.2011 and in response to the notice issued u/s 153A, assessee filed return declaring loss of Rs. 23,61,299/- on 24.01.2012; that assessee entered into two international transactions with its AE during the period under assessment; that assessee has lent foreign currency loans to its subsidiaries, namely, (i) Baba Global Company (FZC) UAE to the tune of Rs. 23,67,52,340/- and (ii) Baba Global Co (BD) Ltd. to the tune of Rs. 15,60,495/-; that no new loan ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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