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TMI Blog2015 (3) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... e direct AO to verify the claim of assessed and then pass the appropriate order. Revision u/s 263 - HELD THAT:- The assessee objected to the proposed enhancement u/s 263 by the Commissioner. Commissioner passed the impugned order holding that the AO failed to make the adjustment towards the benefit of loan advanced by the assessee to its holding company as income in the hands of the assessee and the order passed by the AO is erroneous and prejudicial to the interest of revenue. Commissioner set aside the assessment order and directed the AO to frame the assessment as per the the directions given in the impugned revision order. AR as well as Ld. DR and considered the relevant material on record. The issue is directly covered by the Judgment of Hon ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd [ 2014 (10) TMI 278 - BOMBAY HIGH COURT] the relevant finding of the Hon ble High Court has been produced in the foregoing paras of this order. Accordingly, following the Judgment of Hon ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd. (Supra), we set aside/quash the impugned revision order passed u/s 263 of the Act. - ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med loan and taxing such notional interest in the hands of the Appellant; -failed to appreciate that the income tax being a charge of tax on income of the Appellant, there cannot be any deeming fiction unless otherwise specifically provided by the statute; 2. Without prejudice to the above, the learned AO, after considering the directions of the Hon'ble DRP, erred in adopting 10.14% as the domestic cost of borrowing, disregarding the fact that there were no borrowings availed by the Appellant; 3. The Ld. AO erred in not granting credit for tax deducted at source amounting to ₹ 221,837; and 4. The Ld. AO erred in levying consequential additional interest amounting under section 234B and section 234C of the Act. 3. The assessee issued 172,040,000 equity shares of face value of ₹ 10 at par to its holding Company, J.P. Morgan Special Situations (Mauritius ) Limited. The TPO determined the arm s length price of the equity shares issued at ₹ 26.90 per share and treated the difference between the ALP and actual issue price as a deemed loan advanced by the assessee to its holding company/AE. Accordingly, the TPO adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, there can be no dispute. However, as observed by the Supreme Court in CIT v. B.C. Srinivasa Shetti [1981] 128 ITR 294/5 taxmann.com 1, there is a qualitative difference between the charging provisions and computation provisions and ordinarily the operation of the charging provisions cannot be affected by the construction of computation provisions. In the present case, there is no charging provision to tax capital account transaction in respect of issue of shares at a premium. Computation provisions cannot replace/ substitute the charging provisions. In fact, in B.C. Srinivasa Shetti (supra), there was charging provision but the computation provision failed and in such a case the Court held that the transaction cannot be brought to tax. The present facts are on a higher pedestal as there is no charging provision to tax issue of shares at premium to a nonresident, then the occasion to invoke the computation provisions does not arise. We, therefore, find no substance in the aforesaid submission made on behalf of the Revenue. 47. During the course of hearing the learned Solicitor General also made submissions with regard to taxing income in the hands of the Petitioner ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue has not been discussed in the impugned orders, therefore, the amount of TDS is required to be verified. Since the assessee has already filed a petition u/s 154 for grant of credit for tax deducted at source of ₹ 2,21,837/-, accordingly, we direct AO to verify the claim of assessed and then pass the appropriate order. 11. In the appeal against the revision order the assessee has raised following grounds:- Based on the facts and circumstances of the case, J.P. Morgan Advisors India Private Limited (hereinafter referred to as 'the Appellant') craves leave to prefer an appeal against the order passed by the Commissioner of Incometax 3, Mumbai [hereinafter referred to as the 'learned CIT') under section 263 of the Incometax Act, 1961 (hereinafter referred to as the 'Act') for Assessment Year 20082009, on the following grounds, each of which are without prejudice to one another: 1. On the facts and circumstances of the case and in law, the learned CIT erred in initiating proceedings / assuming jurisdiction / exercising jurisdiction under section 263 of the Act and setting aside the order passed under section 143(3) r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 263 of the Act. Ground no. 1 to 3 12. As we have discussed above that the assessee issued 172,040,000 shares of face value at ₹ 10 at par to its holding company J.P. Morgan Special Situations (Mauritius ) Limited. The TPO determined the ALP of the equity shares issued at ₹ 26.90 per share and treated the difference between the ALP and actual issue price as a deemed loan advanced by the assessee to its holding company/AE and consequently applied the arm s length interest rate of 14.39% for making the transfer pricing adjustment. Subsequently, the Commissioner found from the record that while framing the assessment and making the adjustment u/s 92CA, the AO/TPO has not made the adjustment on account of difference in the shortfall of premium as income of the assessee in respect of the equity shares issued by the assessee to its holding company. Accordingly, the Commissioner issued a show cause notice dated 11.3.2014 u/s 263 proposing to pass such an order enhancing and modifying the assessment order/cancelling the assessment and directing the fresh assessment under the provisions of section 263. The assessee objected to the proposed e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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