Quashed

Essar Power Limited v. Union of India Ministry of Law and Ors.

Bombay HC19 Nov 2014WP/1334/2014

Case brief

AI extract

What is this about?

Certiorari petition challenging Transfer Pricing Order imposing deemed income on CCPS. Court relied on Vodafone IV precedent to quash TPO order regarding CCPS adjustment, thereby modifying the Draft Assessment Order accordingly. Petition disposed of.

What did the court decide?

Quashing of TPO order dated 29.01.2014 regarding CCPS adjustment and modification of the Draft Assessment Order.

Essar Power Limited Vs Union of India Ministry of Law and Ors. — Income Tax | Bombay HC (2014)

901.wp.1334.2014.doc

dik

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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WRIT PETITION NO. 1334 OF 2014

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Essar Power Ltd. ...Petitioner

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vs Union of India & Ors. ...Respondents

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Mr Percy Pardiwala a/w Mr Kalpesh Turalkar i/b Ms Aarti Sathe for the Petitioner Mr Tejveer Singh for the Respondents.

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CORAM : M.S.SANKLECHA & S.C. GUPTE, JJ.

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NOVEMBER 19, 2014

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P.C. :

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This Petition was admitted on 24 March 2014.

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2 The challenge in this Petition is to the order dated 29 January 2014 passed by the Transfer Pricing Officer ( for short “TPO”) under Section 92CA (3) of the Income Tax Act, 1961 ( for short “the Act”). At the time of admitting the petition, liberty was granted to the Assessing Officer to pass the draft Assessment Order but take no further action. We are informed that the Assessing Officer has passed the draft Assessment Order.

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3 By the impugned order the TPO has held that the issue of Compulsorily Convertible Preference Shares ( CCPS ), issued by the Petitioner to its non-resident Associated Enterprise (AE) at the price less than the Arms Length Price (ALP) at which these shares ought to been issued gives rise to income. The impugned order also seeks to tax deemed interest on the shortfall of the amounts received by the Petitioner, considering the shortfall received to be a deemed loan and also charge deemed interest receivable from the preceding

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901.wp.1334.2014.doc

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assessment year 2009-10, in respect of shares issued by the Petitioner to nonresident AE.

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4 The Petitioner has challenged the order passed by the TPO as well as the directions given by DRP for the assessment year 2009-10 in Writ Petition No.1709 of 2012 which was disposed of yesterday in favour of Petitioner. Mr Tejveer Singh, learned Counsel appearing for the Respondent – Revenue fairly states that the issue arising in the present Petition stands covered by the decision of this Court in Vodafone India Services Pvt. Ltd. Vs Union of India, 368 ITR 1 (Vodafone IV) as well as the order passed yesterday in Writ Petition filed by the present Petitioner for the preceding A.Y. 2009-10 (Writ Petition No.1709 of 2014).

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5 In view of the above, the impugned order dated 29 January 2014 of the TPO is quashed and set aside only to the extent it deals with the Transfer Pricing Adjustment arising out of the issue of CCPS by the petitioner to its nonresident AE. As a consequence of the above direction, draft assessment order passed by the Assessing Officer also stands modified to the above extent.

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6 Petition is disposed of accordingly. There shall be no order as to costs.

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( S.C.GUPTE J. ) ( M.S.SANKLECHA J. )

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Essar Power Limited v. Union of India Ministry of Law and Ors.

Case brief

What is this about?

What did the court decide?

Essar Power Limited v. Union of India Ministry of Law and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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