Upesi Ventures Ltd. Vs ACIT (Bombay High Court)
The case of Upesi Ventures Ltd. vs. ACIT before the Bombay High Court revolves around the challenge to a notice issued under Section 148 of the Income Tax Act, 1961, proposing to reopen the assessment for the Assessment Year (AY) 2015-2016. The petitioner, Upesi Ventures Ltd., a company incorporated in Cyprus and registered as a Foreign Portfolio Investor with SEBI, contested the notice, arguing that it was ex facie illegal, untenable, and contrary to the provisions of the Act.
The assessment for the AY 2015-2016 had been completed earlier, accepting the return of income as ‘Nil’. However, the petitioner received a notice alleging that its income had escaped assessment due to failure to disclose interest income from investments in Non-Convertible Debentures (NCDs) during that year. The notice cited the petitioner’s application of the Mercantile system of accounting and contended that accrued interest from the NCDs should have been offered for taxation.
In response, the petitioner raised objections, arguing that the notice was based on a change of opinion and that it had fully disclosed all relevant facts during the original assessment proceedings. Furthermore, the petitioner claimed benefits under the India-Cyprus Double Taxation Avoidance Agreement (DTAA), asserting that interest income could only be taxed when received by the payee.
