Argos Holdings Pte. Ltd. Vs DCIT (ITAT Delhi)
Reassessment on Wound-Up Foreign FPI Held Void: ITAT Quashes ₹456 Cr Addition- Notice to Non-Existent Singapore Company Invalid — ITAT Delhi Strikes Down Reopening
Section 148 Notice Served Post-Dissolution—Reassessment Against Foreign Investor Nullified- Non-Resident FPI with TDS-Compliant Interest Income Not Liable to File ROI: ITAT Delhi–ITAT: Reopening Void Ab Initio — No Jurisdiction to Tax Singapore Entity without PE/POEM
Assessee, a Singapore-incorporated company Argos Holdings Pte. Ltd., wholly owned by Ephesus Holdings Pte. Ltd., Singapore, was a SEBI-registered Category III Foreign Portfolio Investor (FPI). During AY 2015-16, it invested ₹448 crore in Non-Convertible Debentures (NCDs) issued by Sugam Vanijya Holdings Pvt. Ltd. (now VR Dakshin Pvt. Ltd.) & earned interest of ₹8.24 crore on which TDS @5.253% was duly deducted u/s 194LD. It claimed exemption from return-filing u/s 115A(5) as the entire income had suffered tax deduction at source.
AO reopened assessment u/s 147/148 on information from the Non-Filer Management System, treating the investment as “unexplained business income” & the interest as “undisclosed income”, alleging shell-like structure & absence of genuine business activity. Reassessment notices dated 31.03.2021 were served only on 25.06.2021, after the company had been dissolved on 05.06.2021 under Singapore law.
