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TMI Blog2021 (7) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal which are prima facie worth serious consideration and the assessee thus has an arguable case in appeal. We have also noted that almost 98% of the impugned demand is in respect of this ALP adjustment. We have also taken note of learned counsel s submission that the assessee has already provided a corporate guarantee by its ultimate parent company, i.e. Vodafone International Holdings BV, for an amount of ₹ 3,538.48 crores for the assessment year 2008-09 and this guarantee is yet to be returned by the income tax department and that this guarantee adequately covers the amount disputed in the appeal. However, when we pointed out that the guarantee is specifically for the assessment year 2008-09 and so far as that assessment year is concerned, as things stand now, the matter is resolved in favour of the assessee by Hon ble jurisdictional High Court, learned counsel submits that as the matter is pending before Hon ble Supreme Court, the guarantee is very much alive and, being in possession of the income tax authorities anyway, it can very well be enforced by the income tax authorities. As for the issue being raised that there cannot be a substantive addition in this year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of the tax and interest demands, aggregating to ₹ 1128.46 crores, in the matter of assessment under section 143(3) r.w.s. 144C of the Income Tax Act, 1961, for the assessment year 2014-15, till the disposal of the related appeal before us. 2. Briefly stated, some material facts, as culled out from the material on record, are as follows. As we set out our understanding of facts, we must make it clear that as this exercise has been conducted without the benefit of a detailed hearing on these aspects, there may be unreconciled minor variations in our perceptions vis- -vis that of the assessee, but then, given the limited purposes for which the facts are being set out, nothing much really turns on these variations, even if any. Be that as it may, the assessee company, incorporated in India in March 1999, as 3 Global Services Pvt Ltd, is owned by a Mauritian company now known as Vodafone Tele-Services (India) Holdings Limited [ Vodafone Services- M , in short], which, in turn, is owned by a Cayman Islands-based company by the name of CGP Investments (Holdings) Limited [ CGP- Cayman , in short]. CGP-Cayman, as a result of the acquisition of its ownership by Vodafone Intern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investments Limited, Mauritius [ CGPI- M , in short] is a Mauritius based company that is fully owned by CGP-Cayman Islands . In effect thus, it would seem that as a result of the exercise of the above option, the CGP-Cayman Islands has been able to increase shareholdings in Vodafone India inasmuch as the importance of Scorpio Beverages Pvt Ltd [ Scorpio Beverages - in short] lies in the fact that, through several fully owned subsidiaries of Scorpio Beverages layered in between, Scorpio Bevarges owned substantial shareholding in Telecom Investments India Pvt Ltd [ TII , in short] which holds significant equity capital of Vodafone India Limited. In effect, thus, it could be said that the assessee company s nomination of CGPI-M for buying shares in Scorpio Beverages held by Analjeet Singh Group, resulted in an increase of equity shareholding of CGP Cayman Islands in the Vodafone India. It may be noted that Analjeet Singh and his associate, as also two other persons who were playing a similar role under the Framework Agreement- namely Asim Ghosh Group and IDFC Group, were seemingly independent but de facto under full control of CGP-Cayman Islands. It was also noted that as a result o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that on the face of it, while many of the facets of the main issue, i.e. ALP adjustment on account of assignment of the call or put options, raised in this appeal, so far as the ALP adjustment in respect of options rights are concerned, seem to be covered against by a decision of the coordinate bench, in assessee s own case for the assessment year 2012-13- reported as Vodafone India Services Pvt Ltd Vs DCIT [(2018) 169 ITD 375 (Ahd)] which was authored by one of us (i.e. the Vice President), there are many issues raised in the appeal which are prima facie worth serious consideration and the assessee thus has an arguable case in appeal. We have also noted that almost 98% of the impugned demand is in respect of this ALP adjustment. We have also taken note of learned counsel s submission that the assessee has already provided a corporate guarantee by its ultimate parent company, i.e. Vodafone International Holdings BV, for an amount of ₹ 3,538.48 crores for the assessment year 2008-09 and this guarantee is yet to be returned by the income tax department and that this guarantee adequately covers the amount disputed in the appeal. However, when we pointed out that the guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistencies in the approach of the income tax authorities, all those aspects will surely be considered at the stage of disposal of the appeal, and we are also alive to the fact that the litigation of the assessee with respect to the transaction, which involves a complex web of arrangements involving a large number of entities in several jurisdictions and is spread over several assessment years, is being conducted at different locations in a fragmented manner, and, given such a situation, it is indeed possible that there may be some contradictions due to variety of factors but these contradictions per se , even if that be so, cannot be put against the bonafides of the impugned tax demands at this stage. As regards the arguments on the first proviso to Section 254(2A), whether the said proviso is applicable or not, the Tribunal is not denuded of the powers to direct that the part payment of demands even in excess of 20% be made by the assessee before the stay is granted in a fit case. While it may be argued, whatever be the legally sustainable merits of such a proposition, that the limitation placed by the first proviso to Section 254(2A) comes in the way of the Tribunal granting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out to approximately 20% of the disputed tax demand, within 30 days from today; (ii) the assessee will furnish a corporate guarantee from an associate company, which has unencumbered assets in India in excess of the balance disputed demands, i.e. ₹ 900 crores; and (iii) the assessee will fully cooperate in expeditious disposal of the appeal in question, as also other appeals which are tagged and clubbed with this appeal, and in case of any lapses on the part of the assessee in this regard, this stay shall stand vacated forthwith . This order shall remain in force for six months from today or till further orders- whichever is earlier. The assessee and the income tax department are also directed to furnish the details of all the related appeals, which may have any bearing with the issues in this appeal, so that the matter is placed before the bench, at the earliest possible, for tagging and clubbing, with a view to ensure that all the related matters are taken up for hearing together in a holistic manner, if necessary, on a day to day basis and at the earliest possible. Ordered, accordingly. 7. In the result, the stay application is partly allowed in the terms indicated above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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