Case Law Details
Cognizant Technology-Solutions India Pvt. Ltd. Vs Dy. Commissioner-of Income Tax (ITAT Chennai)
Held that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the revenue and thus, the CIT has rightly exercised his jurisdictional powers
Facts-
M/s.Cognizant Technology Solutions India Ltd. is engaged in the business of software development filed its ROI for the AY 2014-15 on 29.11.2014, which was subsequently revised on 07.10.2015. During the FY relevant to the AY 2014-15, the assessee has purchased 9,16,133 shares from its shareholder M/s.Congizant (Mauritius) Ltd. @ Rs.23,915/- per share (of face of Rs.10/- each) and paid consideration amounting to Rs.2190,93,20,625/-. The assessee had purchased 2,59,253 shares from M/s. Cognizant Technology Solutions Corporation, USA. At Rs.23,915/- per share and paid consideration amounting to Rs.620,00,35,495/-. The assessee had also purchased 16,709 shares from M/s. Market RX Inc. USA and 11,873 shares from M/s.CSS Investments LLC, USA and paid consideration amounting to Rs.39,95,95,735/- and Rs.28,39,42,795/- respectively.
During the course of assessment proceedings, several hearings were held by the AO and the assessee furnished necessary information relating to buy back of shares from its shareholders. However, with respect to the buyback of shares, the AO had accepted the explanation of the assessee and no adjustment was made to the total income.
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