Gujarat High Court
M/S Niko Resources Ltd vs Deputy Commissioner Of Income Tax on 9 February, 2016
Author: Harsha Devani
Bench: Harsha Devani, G.R.Udhwani
C/SCA/2177/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO.2177 of 2016
=============================================
M/S NIKO RESOURCES LTD., & 1....Petitioner(s)
Versus
DEPUTY COMMISSIONER OF INCOME TAX....Respondent(s)
=============================================
Appearance:
MR SN SOPARKAR, SR. ADVOCATE with MR B S SOPARKAR,
ADVOCATE for the Petitioner(s) No.1 - 2
=============================================
CORAM: HONOURABLE MS. JUSTICE HARSHA DEVANI
and
HONOURABLE MR. JUSTICE G.R.UDHWANI
Date : 09/02/2016
ORAL ORDER
(PER : HONOURABLE MS. JUSTICE HARSHA DEVANI)
1. Mr. S.N. Soparkar, Senior Advocate, learned counsel for the petitioners invited the attention of the court to the reasons recorded for reopening the assessment to point out that according to the Assessing Officer income chargeable to tax has escaped assessment in relation to the transfer of 10% interest in Block KG-DWN-98-3 (known as KG Basin) by the petitioner company to M/s Niko (NECO) Ltd Cyprus. It was submitted that apart from the fact that no transfer has taken place in the year under consideration, the Assessing Officer, in the reasons for reopening, himself has accepted that the interest was transferred without any consideration. Ex facie, therefore, there cannot be any gain which has accrued to or has been received by the petitioner which is liable to be taxed under section 42(2) of the Income Tax Act, 1961. Reference was made to an unreported decision of this court in the case of Page 1 of 2 HC-NIC Page 1 of 2 Created On Thu Feb 11 01:51:38 IST 2016 C/SCA/2177/2016 ORDER M/s Priyanka Pharamachem v. Income Tax Officer rendered on 18th January, 2016 in Special Civil Application No.20492/2015 wherein the court in a similar set of facts held that such transaction did not invite any tax liability. It was submitted that in the facts of the present case, no reasonable person could have reason to believe that income chargeable to tax has escaped assessment and hence, the assumption of jurisdiction on the part of the Assessing Officer is without authority of law.
2. Having regard to the submissions advanced by the learned counsel for the petitioners, issue notice returnable on 8th March, 2016. By way of ad-interim relief, further proceedings pursuant to the impugned notice dated 27th March, 2015 issued under section 148 of the Income Tax Act, 1961 (Annexure 'H' to the petition) are hereby stayed.
Direct Service is permitted.
( Harsha Devani, J. ) ( G.R. Udhwani, J. ) hki Page 2 of 2 HC-NIC Page 2 of 2 Created On Thu Feb 11 01:51:38 IST 2016