Case Law Details
BCP V Singapore FVCI Pte. Ltd. Vs ACIT (ITAT Delhi)
In a recent development, the Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favor of BCP V Singapore FVCI Pte. Ltd. (hereinafter referred to as “BCP Singapore”) in a case against the Assessing Officer (AO) for the assessment year 2017-18. The dispute revolves around the reopening of assessment proceedings, treatment of a significant amount as unexplained investments, and the subsequent imposition of interest and initiation of penalty proceedings.
Ground 1 – Validity of Reassessment Proceedings: BCP Singapore has challenged the validity of the reassessment proceedings under Section 148 of the Income-tax Act, 1961. The grounds of appeal include contentions that the reopening is in excess of jurisdiction, bad in law, and not in accordance with legal procedures. The appellant seeks the proceedings under Section 148 to be struck down.
Ground 2 – Treatment of Unexplained Investments: A major point of contention is the erroneous treatment by the AO of Rs 203,56,82,630 as unexplained investments, considering it as income for the year under consideration. BCP Singapore argues that it neither earned any income nor made investments in non-convertible debentures (NCDs) during the relevant financial year. The appellant contends that the AO failed to consider submissions explaining the source of NCD investments made in the fiscal year 2014-15, leading to an unjust addition of Rs 203,56,82,630. Furthermore, BCP Singapore argues that the amount in question was only repatriated from its Indian bank account to its foreign bank in Singapore during the assessment year 2017-18.
Ground 3 – Consequential Interest: BCP Singapore challenges the imposition of interest under Section 234A and 234B of the Income-tax Act, 1961. The appellant argues that the AO erroneously levied interest and seeks relief from the interest charges imposed.
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