JUDGMENT In this petition under article 226 of Constitution of India, petitioner challenges show- cause notice dated January 17, 2014, and order dated January 30, 2014, issued by respondent No. 2-Transfer Pricing Officer ("the TPO") under section 92CA(3) of Income-tax Act, 1961 ("the Act"). Brief facts leading to this petition are as under: (a) petitioner is wholly owned subsidiary of Mauritian entity, namely, Vodafone Teleservices (India) Holdings Ltd. (the holding company); (b) On July 16, 2009, petitioner allotted 4,58,372 equity shares of Rs.10 each at premium of Rs. 7,100 per share (total price being Rs. 7,110 per share) aggregating to total consideration of Rs. 325.90 crores to its holding company; (c) On January 24, 2010, petitioner allotted further 1,02,659 equity shares of Rs. 10 each at premium of Rs. 6,437 per share (total price being Rs. 6,447 per share) aggregating to total consideration of Rs. 66.18 crores to its holding company. Thus, in financial year 2010-11, petitioner allotted aggregate of 5,61,031 equity shares at aggregate consideration of Rs. 392.08 crores after determining its valuation in terms of CCI guidelines; (d) On October 14, 2010, petitioner filed its return of income for assessment year 2010-11. Along with its return of income, petitioner filed Form 3CEB in relation to its international transaction. However, by way of abundant caution, petitioner appended note thereto as under: "Note 1: company has issued equity shares of Rs. 10 each fully at premium. As per section 92(1) of Income-tax Act, 1961, any income arising from international transaction shall be computed having regard to arm s length price. This transaction of issue of equity shares does not affect income of company. However, out of abundant caution, same is reported here. company has also received share application money for issue of equity shares." (e) Respondent No. 3-Assessing Officer issued notice dated August 27, 2011, under section 143(2) of Act directing petitioner to submit certain details for carrying out scrutiny assessment under section 143(3) of Act; (f) Thereafter, on March 28, 2012, Assessing Officer made reference to Transfer Pricing Officer under section 92CA(1) of Act to determine arm's length price (ALP) with reference to transaction reported in Form 3CEB; (g) On January 17, 2014, Transfer Pricing Officer issued showcause notice to petitioner to show cause why transfer price as fixed at Rs. 7,110 and Rs. 6,447 per share in respect of equity shares issued in assessment year 2009-10 should not be adjusted taking into account arm's length price at Rs. 60,445 per share; and (h) petitioner filed its preliminary reply dated January 22, 2014, objecting to jurisdiction of Department to initiate any proceeding under Chapter X of Act. In circumstances, petitioner requested Transfer Pricing Officer to decide preliminary issue of jurisdiction, viz., whether Chapter X of Act is at all applicable in respect of issue of shares by petitioner to its non-resident holding company. present petition was filed on January 27, 2014, challenging show- cause notice dated January 17, 2014, as being without jurisdiction. At hearing of petition, on January 30, 2014, learned counsel for respondents stated that Transfer Pricing Officer had already decided show-cause notice dated January 17, 2014, by order on January 29, 2014. In circumstances, petitioner was granted leave to amend petition to mount challenge to order dated January 29, 2014, of Transfer Pricing Officer. Accordingly, petitioner amended petition by challenging order dated March 29, 2014, of Transfer Pricing Officer, making following adjustments: Sl. Adjustment Nature of international transaction No. amount (Rs.) Shortfall in price of shares issued to 1 29,990,701,795 1 29,990,701,795 associated enterprise Interest on deemed loan of shares 2 2,468,195,827 issued in this year Interest on deemed loan of shares 3 1,886,306,036 issued in last year Total 34,345,203,658 It is not necessary to set out any other fact or to refer to grounds on which Transfer Pricing Officer passed above order, as controversy which is subject matter of present petition was also subject matter of Vodafone India Services P. Ltd. v. Union of India W. P. No. 871 of 2014-since reported in [2014] 368 ITR 1 (Bom) filed by this petitioner in respect of assessment year 2009-10. In assessment year 2009-10, petitioner had issued 2,89,224 equity shares of face value of Rs. 10 at premium of Rs. 8,509 per share to its holding company and had thus received total consideration of Rs. 246.28 crores from its holding company. Assessing Officer referred matter to Transfer Pricing Officer who passed order on January 28, 2013, taking view that petitioner ought to have valued each equity share at Rs. 53,775 resulting in shortfall to extent of Rs. 45,256 per share, aggregating to Rs.1,308.91 crores. Transfer Pricing Officer further held that this difference between arm's length price and issue price (including premium) was required to be treated as deemed loan given by petitioner to its holding company and deemed interest on such deemed loan at Rs. 88.35 crores was also treated as interest income. issue of jurisdiction was decided as preliminary issue by Dispute Resolution Panel (DRP) by its order dated February 11, 2014, in favour of respondent-Revenue. After hearing learned counsel for petitioner and learned Solicitor General of India, this court by judgment dated October 10, 2014, has held that issue of shares at premium by petitioner to its non-resident holding company does not give rise to income in international transaction. In circumstance, application of Chapter X of Act to such transaction is without jurisdiction. Accordingly, this court quashed and set aside order of reference made by Assessing Officer to Transfer Pricing Officer, order of Transfer Pricing Officer, Draft assessment order under section 144C(1) of Act and order dated February 11, 2014, of Dispute Resolution Panel. Since petitioner challenged order dated January 29, 2014, of Transfer Pricing Officer and this court granted interim relief against further proceeding, matter did not reach stage of draft assessment order under section 144C(1) of Act or stage of Dispute Resolution Panel. Learned counsel for parties agree that controversy raised in present petition is squarely covered by aforesaid judgment dated 10 October 2014. In aforesaid judgment, we have, inter alia, held that: (i) sine qua non to apply Chapter X of Act would be arising of income under Act out of international transaction. This income should be chargeable under Act before Chapter X can be applied; (ii) definition of "income" does not include within its scope capital receipts arising out of capital account transaction unless so specified in section 2(24) of Act as income; (iii) There is no charge in Act to tax amounts received and/or arising on account of issue of shares by Indian entity to non-resident entity in sections 4, 5, 15, 22, 28, 45 and 56 of Act. This is as it arises out of capital accounts transaction and, therefore, is not income; (iv) Chapter X of Act does not contain any charging provision but is machinery provision to arrive at arm's length price of transaction between associated enterprises; and (v) Chapter X of Act does not change character of receipts but only permits requantification of income uninfluenced by relationship between associated enterprises. In view of aforesaid judgment dated October 10, 2014, passed in Writ Petition No. 871 of 2014 which was filed by this very petitioner, we allow writ petition. Accordingly, we quash and set aside order of reference dated March 28, 2012, made by Assessing Officer to Transfer Pricing Officer under section 92CA(1) of Act to showcause notice dated January 17, 2014, issued by Transfer Pricing Officer and order dated January 29, 2014, passed by Transfer Pricing Officer under section 92CA(3) of Act. We make it clear that we have only quashed aforesaid order of Transfer Pricing Officer made under section 92CA(3) of Act, i.e., Chapter X of Act. Therefore, issue of equity shares at premium to non-resident holding company and working out its arm's length price, will not arise in this case. However, it will be otherwise open to Assessing Officer to pass assessment order under section 143(3) of Act in accordance with law. Accordingly, rule made absolute in above terms, with no order as to costs. *** Vodafone India Services P. Ltd. v. Union of India