No Escapement Of Income By Singaporean Entity On Repatriating Rs.203.56 Cr. Arising From Redemption Of NCDs: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Singaporean Entity has not escaped the income on repatriating Rs.203.56 Cr. arising from redemption of non-convertible debentures (NCDs).

The bench of Astha Chandra (Judicial Member) and B. R. R. Kumar (Accountant Member) has observed that the Assessing Office has not examined the relevant records before them wherein the interest earned has been duly offered to tax.

The NCDs amounting to Rs. 150,00,00,000 were subscribed by the assessee in a company named M/s Hindustan Power Projects P. Ltd. The assessee has also earned interest and that interest has been offered to tax in the assessment year 2015-16 and 2016- 17 and the NCDs were redeemed in the month of September 2015 and October 2015 relevant to the assessment year 2017- 18 and then transferred the funds from Deutesche Bank India to J.P Morgan Bank in Singapore. The assessee has obtained form 15CB and filed form 15CA with regard to the remittances to its J.P. Morgan Bank account in Singapore.

The assessee was subjected to reassessment on the basis of failure to make full and true disclosure of the income.

The tribunal held that there was no escapement of income during the year and hence, the notice issued under section 148 is considered to be void ab initio and consequently the assessment is treated as nullity.

Counsel For Appellant: Porus Kaka

Counsel For Respondent: Vizay B. Vasanta

Case Title: BCP V Singapore FVCI Pte. Ltd. Versus ACIT

Case No.: ITA No. 449/Del/2023

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