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TMI Blog2024 (10) TMI 1584X X X X Extracts X X X X X X X X Extracts X X X X ..... us of the holding company i.e. Gold Singapore. The identity and creditworthiness of Gold Singapore and the genuineness of the transaction has been accepted by the Department while framing assessments for AY 2012-13, 2015-16 and 2020-2021. The transaction of investment of share capital in the petitioner company has been duly examined in subsequent assessment years and accepted in completed assessments/reassessments under Section 143 (3) - Once the nature and source of receipts have been satisfactorily explained/proved and AO has not contradicted the explanation/information given by the assessee, there lies no cause for initiating the reassessment action for the impugned AYs 2008-09 2011-12. Thus, we are of the opinion that the reasons for initiation of the impugned assessment proceedings do not survive and therefore the impugned notices issued u/s 148 of the Act and the proceedings initiated pursuant thereto are quashed. Decided in favour of assessee. - HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petitioner Through: Mr. S. Ganesh, Senior Advocate with Mr. Vaibhav Kulkarni, Mr. Udit Naresh Mr. Himanshu Aggarwal, Advocates. For the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2) of the Act, stating that M/s. Gold Hotels Resort Pte. Ltd. referred as Gold Singapore has made an investment of Rs. 39.271 crores in the petitioner s company and this income has escaped assessment. 7. Petitioner filed objections to the initiation of the impugned reassessment proceedings which were dismissed on 23.10.2015 by respondent No. 1. WP(C) 10543/2015 M/s. Experion Developers Pvt. Ltd. Vs. Income Tax Officer Anr. 8. Petitioner M/s. Experion Developers Pvt. Ltd. [ EDPL ] (formerly known as Gold Developers Pvt. Ltd.), also a private limited company, engaged in the business of real estate development, filed return of income declaring loss of Rs. 88,70,133/- for the AY 2008-09 and the return of income was accepted under Section 143 (1) of the Act. 9. Respondent No. 1 issued the impugned notice dated 31.03.2015 under Section 148 of the Act, proposing to reassess the income of the petitioner for the AY 2008-09. On the request of the petitioner, respondent No. 1 supplied the copy of reasons along with notice dated 17.09.2015 issued under Section 143(2) of the Act, stating that M/s. Gold Hotels Resort Pte. Ltd. referred as Gold Singapore has made an investment of Rs. 142.422 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.08.2018. WP(C) 10324/2018 (Experion Hospitality Pvt. Ltd. (earlier known as Gold Resorts Hotels Pvt. Ltd. Vs. Assistant Commissioner of Income Tax Ors. 22. Petitioner Experion Hospitality Pvt. Ltd. (earlier known as Gold Resorts Hotels Pvt. Ltd.) filed a return of income for the AY 2011-12, declaring the loss of Rs. 1,68,72,208/-. Notice under Section 142 (1) of the Act was issued by respondent No. 2, calling for various details of the petitioner. 23. Petitioner submitted details of the share application money received and shares issued during the AY 2011-12 and also informed that the funds were received from Gold Singapore towards Share application Money. 24. Assessment Order under Section 143 (3) of the Act was passed, thereby, reducing the loss to Rs. 71,67,587/-. 25. Respondent No. 1 issued a notice under Section 148 of the Act, proposing to reassess the income of the petitioner for the AY 2011-12. The reasons recorded for reassessment included the information received from DIT (Intell. Cr. Inv.) regarding funds received by assessee from foreign entities. It also included the report from the First Secretary (Economic) in High Commission of India at Singapore vide letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wood Invest Holdings Ltd. 2. The assessee maintained bank account with ING Vysya Bank, Delhi in which substantial remittances had been received. 3. Sh. Arvind Tikoo the Director and the main person behind the group was evasive in most of his replies, on the plea that he is an NRI, his PAN is AONPT3527L and had not filed any return of income in India. 4. A close look at the statements reveal that most of the companies in the list remitting funds to the Indian Companies on behalf of Gold Singapore are located in different Jurisdictions mostly tax heavens such as British Virgin Island, Dutch Antilles etc. In view of the report received, the Singapore Company (Gold Singapore)apparently does not appear to be carrying out any regular business activities in Singapore and has been floated to act as a conduit to funnel investments into Indian companies. A series of transactions have been undertaken through a complex legal arrangements among entities spread across various jurisdictions to fund investments made in India. The origin of fund is from companies located in tax heavens with dubious antecedents. As per data on ITD and as verified by TA/ Sr. TA the case was assessed u/s143 (3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year is under challenge before this Hon ble Court. 2008-09 2009-10 1,00,00,000 40,33,98,203 No assessment under section 143 (3). 2009-10 2010-11 21,96,025 10,05,82,790 No assessment under section 143 (3). 2010-11 2011-12 4,96,820 2,31,33,677 In assessment completed under section 143 (3) the issue regarding share capital/premium has specifically been discussed and accepted by Revenue. Reassessment initiated for this assessment year is under challenge before this Hon ble Court. 2011-12 2012-13 12,55,184 5,75,00,000 Transaction accepted in assessment completed under section 143 (3) In assessment completed under section 147/143 (3) the issue regarding share capital/premium has specifically been discussed and accepted by Revenue. 2012-13 2013-14 (2,057) (94,260) Transaction accepted in assessment completed under section 143 (3). 2013-14 2015-15 5,00,000 3,08,74,074 Transaction accepted in assessment completed under section 143 (3). 2014-15 2015-16 6,84,650 4,22,97,199 In assessment completed under section 143 (3), addition on the issue of share capital/premium was made, however, on Petitioner s Appeal, the Commissioner of Income Tax (Appeals) deleted the addition. 2015-16 2016-17 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial intelligence was received by Jt. secy. (Ft TR)-II, CBDT from The First Secretary (Economic) in High commission of India, at Singapore, vide letter dated 31/10/2011, that an entity M/s Gold Hotels Resort Pte. Ltd, a Singapore based company, had made large investments in Indian entity namely, M/s. Experion Developers Pvt. Ltd. and M/s. Experion Developers International Pvt. Ltd. (formerly known as Gold Developers International .Pvt. Ltd.)(Now merged with M/s. Experion Developers Pvt. Ltd.) According to the report, it was observed that: 1. During the year under consideration, the company M/s Gold Hotels Resort Pte. Ltd, hereinafter referred as Gold Singapore has made an alleged investment of Rs. 36.910 crores in the assessee company EDPL and Rs. 183 crores in the company that has amalgamated into this company namely, EDIPL. 2. As per the information, Gold Singapore is owned by only one share holder M/s Gemwood lnvest Holdings Ltd. having address in British Virgin Island. 3. The Directors of Gold Singapore include the following: Name Nationality Address Arvind Tiku Indian National 329, River Valley Road # 25-02, Yong Ann Park, Singapore 238361 Yap Chee Keong Michael Singapore Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing out any regular business activities in Singapore and has been floated to act as a conduit to funnel funds into Indian Companies. Therefore, the source of investment into the assessee company (which is wholly owned subsidiaries of Gold Singapore) raises serious doubts and suspicion on the genuineness of these invtesments. A series of transactions have been undertaken through a complex legal arrangements among entities spread across various jurisdictions to fund investments made in India. The origin of fund in the hands of companies located in tax heavens with dubious antecedents and background of shareholders /promoters needs to be further investigated. Moreover, the assessee company is the beneficiary of these credits which have been made in their books of accounts. From the above detailed and specific information, pertaining to the assessee company, and independent examination of the entire material available on the record and application of mind, I have reason to believe that an amount at least of Rs.31.834 Crores has escaped assessment in case the of M/s. Experion Developers Pvt. Ltd. (formerly known as Gold Developers Private Ltd) and amount of Rs. 183 crores has escaped as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for A.Y. 2012-13 on 29.09.2012 declaring total loss of Rs. 3,93,18,429/-. The case of the assessee was selected under scrutiny and assessment was completed u/s 143 (3) of the IT Act on 19.03.2015 at an income of Rs. 23,60,539/- after making addition of Rs. 4,16,78,968/- on account of disallowance of expenses. During the year assessee was engaged in the business of construction 7 development of projects which includes hotels, resorts, motels, inns, guest house cottage etc. 2. An information was received from DIT (Intelligence Criminal Investigation), New Delhi regarding fund received by the assessee from foreign entities. As per information during the year under consideration, the foreign Singapore based entity M/s Gold Hotels Resorts Pte. Ltd. (in short Gold Singapore ) has made investment of Rs. 5.75 crores in assessee company. In addition to that, the same foreign entity has made investment of Rs.36.910 crores company M/s Experion Developers Pvt. Ltd. (in short EDPL) and Rs. 183 crores in the company M/s Experion Developers International Pvt. Ltd. (in short EDIPL ). As per information, total equity share capital of the investing company i.e Gold Singapore was around 50,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of query raised vide notice u/s 142 (1) dated-14.04.2021, they explained that the office of the foreign entity has been shifted from earlier premises situated at 50, Raffeles Place, #15-05/06, Singapore Land Tower, Singapore-048623 of M/s Gold Hotels Resorts Pte. Ltd., to 3, Church Street, # 16-04/05, Samsung Hub, Singapore-049483. In support of their claim, they have submitted a copy of lease agreement with lessee the copy of submission made before the Accounting and Corporate Regulatory Authority(ACRA), Singapore in respect of change of address to 3, Church Street, # 16-04/05, Samsung Hub, Singapore-049483. 5. During the assessment proceeding, a reference has been made to Singapore Tax Authority through FT TR vide letter no. Pr.CIT-3/FT TR/2019-20/2155 dated 23.12.2019, to verify the creditworthiness of subscriber of equity share capital raised by the assessee-company from M/s Experion Holding PTE Ltd. situated at 3, Church Street, Singapore. The reply from the Singapore Tax Authority is still awaited. 6. In view of the above submissions and the details filed by the assessee-company, the income assessed u/s 143 (3) of the IT Act is accepted as under:- I Return loss as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds AY 2015-16, petitioner had received funds from its parent company Gold Singapore in identical manner, as received during AY 2008-09. Vide assessment order dated 30.12.2017, the amount of share premium received by the petitioner from Gold Singapore was added in the hand of the petitioner as taxable under Section 68 of the Act. However, on appeal, the Commissioner of Income Tax (Appeals) deleted the additions made under Section 68 of the Act vide a detailed order dated 09.09.2019. 36. The impugned reassessment proceedings had been initiated primarily for the reason that Gold Singapore does not appear to be carrying out any business activities in Singapore and has been floated to act as a conduit for further investments in Indian companies, but in the assessment order dated 22.04.2021, the Assessing Officer has accepted the transaction of share application money/share capital received from Gold Singapore without any addition in that regard and also accepted the status of the holding company i.e. Gold Singapore. The identity and creditworthiness of Gold Singapore and the genuineness of the transaction has been accepted by the Department while framing assessments for AY 2012-13, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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