9911796707
TMI Blog2020 (2) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as RBI approval letter which specifically prohibited devolvement of foreign exchange to the assessee. On the contrary, except for mere suspicion allegation, nothing was brought on record by AO to counter the assessee s claim. It is beyond doubt that the assessee was acting as co-lead manager in the aforesaid issues but the allegations of AO that the fee was received in that capacity through MLINT is without any corroborative evidences. Therefore, the conclusion of CIT(A) could not be faulted with and hence concurring with the same, we dismiss the appeal filed by the revenue. - I.T.A. No.2727/Mum/2004, 7806/Mum/2004 (Assessment Year: 1995-96) - - - Dated:- 2-1-2020 - HON BLE SHRI MAHAVIR SINGH, JM AND HON BLE SHRI MANOJ KUMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , perused relevant material on record including written submissions filed before us and applied our mind to the subject matter of the appeal. We have also deliberated on judicial pronouncements as cited before us. Our adjudication would be as given in succeeding paragraphs. 4.1 Facts on record would reveal that the assessee being resident corporate assessee stated to be engaged in providing financial consultancy and allied services was subjected to reassessment proceedings for year under consideration u/s 143(3) r.w.s.147 of the Act, on 28/03/2003 wherein the eligible amount u/s 80-O was reduced to ₹ 375.65 Lacs as against ₹ 772.51 Lacs stated to be determined in an assessment framed u/s 143(3) on 30/03/1998. 4.2 The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued u/s 143(2) 142(1) calling for requisite details from the assessee. 4.4 The perusal of reassessment order would reveal that the subject matter of dispute before us is on account of fees received from three entities, for which the assessee acted as co-lead manager and received fees from MLINT: - No. Name Amount (Rs.) 1. East India Hotels 104.38 Lacs 2. JCT Ltd 115.93 Lacs 3. Raymond Woolen Mills 176.55 Lacs Total 396.86 Lacs The assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een MLINT and other managers, it was agreed that MLINT being the lead manager would coordinate the issue and collect the commission payable by the Raymond to all the managers by way of deducting the same from the sale proceeds of the ADRs abroad and then remit to each manager its proportionate share of management-cum-underwriting commission. Not only this, as per certificate given by Indian solicitor in the offering circular, the assessee was named as co-lead manager for the aforesaid issue. Further, as per service agreement dated 27/03/1995 entered into by Merrill Lynch Group entities, the assessee could provide as well as avail services in respect of new issue transactions and derivative instrument transactions. 4.6 In the above backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has been named as one of the co-lead managers. Assessing Officer also accepted the fact that in his capacity as co-lead managers, the assessee should buy 9 million worth shares and assessee has green shoe option to purchase further 10% but RBI approval given to the assessee clearly states that there will be no devolvement of foreign exchange on assessee for acting as lead manager. In the absence of permission from RBI, assessee would not have discharged this commitment as co-lead manager when it was required to purchase the shares in his capacity as lead manager. Further this fact was also confirmed by Merrill Lynch that amounts which have been paid to the assessee are in consideration of the services rendered by the assessee to Merri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in terms of service agreement dated 23/03/1993 as per revenue sharing formula agreed therein. The attention has also been drawn to confirmatory letter of MLINT confirming the aforesaid fact. It has also been pointed out that the RBI approval letter specifically prohibited devolvement of foreign exchange to the assessee and therefore, the assessee could not have discharged the commitment of underwriting as a lead manager. 6. Upon careful consideration of factual matrix as enumerated in the preceding paragraphs, we are of the considered opinion that no addition would be sustainable in law merely on the basis of suspicion, conjectures or surmises. The assessee had placed on record sufficient documentary evidences to substantiate its c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
