Seedworks Holdings Mauritius v. Union of India & Ors
[Citation -2020-LL-0916-25]

Citation 2020-LL-0916-25
Appellant Name Seedworks Holdings Mauritius
Respondent Name Union of India & Ors.
Court HIGH COURT OF DELHI AT NEW DELHI
Relevant Act Income-tax
Date of Order 16/09/2020
Assessment Year 2012-13
Judgment View Judgment
Keyword Tags reassessment proceedings • interest of revenue • vivad se vishwas scheme
Bot Summary: Present application has been filed by the petitioner seeking permission to withdraw the present writ petition with liberty to approach this Court in the event the respondents fail to drop the re-assessment proceedings initiated against Wand Group and the proceedings under Sections 201(1) and 201(1A) of the Income tax Act, 1961 W.P. 1163/2018 Page 1 of 4 against the SeedWorks Singapore or act in any manner contrary to the assurances/clarifications issued by respondent no.3. 148 initiated against M/s. Wand Equity Portfolio II LP and M/s. Wand Affiliates Fund LP shall be dropped since all the proceedings pertain to the same transaction and income from the transaction should be taxed only once. Accordingly no further action shall be taken against M/s. Seedworks Singapore under the IT Act, 1961 and the order shall be issued to M/s Seedworks, Singapore dropping the proceedings. Based on the above clarification/assurances if the company proceeds under the VsV scheme, the Department shall co-operate with the company to withdraw/bring to a close the writ petition before the Delhi and Hyderabad High Court and the application before the DRP. The department shall also expeditiously bring an end to all other proceedings and litigation as set out above. One such letter is reproduced hereinbelow:- To Wand Equity Portfolio II LP 260 Crandon Boulevard Suite, 32 # 75, Key Biscayne, Florida, USA-33149 Sir, Sub: Dropping of re-assessment proceedings u/s 147 of the Income tax Act, 1961 for the AY 2012-13, in your own case-Reg. The subject proceedings were initiated to tax the capital gains earned on sale of equity shares of SeedWorks India Private Limited, pursuant to the ruling of the Hon ble AAR dated 08 November 2017. The re-assessment proceedings initiated under Section 147 of the Act are hereby dropped.


$ 1 * IN HIGH COURT OF DELHI AT NEW DELHI + W.P. (C) 1163/2018 SEEDWORKS HOLDINGS MAURITIUS ... Petitioner Through: Mr.Porus Kaka, Sr.Advocate with Mr.Rahul Jain, Advocate. versus UNION OF INDIA & ORS. ...... Respondents Through: Mr.G.C.Srivastava, Advocate for R- 3/Revenue Department with Mr.Suvinay K Dash, Advocates. % Date of Decision: 16th September, 2020 CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SANJEEV NARULA JUDGMENT MANMOHAN, J: (Oral) C.M.No. 22770/2020 1. application has been listed before this Bench by Registry in view of urgency expressed therein. same has been heard by way of video conferencing. 2. Present application has been filed by petitioner seeking permission to withdraw present writ petition with liberty to approach this Court in event respondents fail to drop re-assessment proceedings initiated against Wand Group and proceedings under Sections 201(1) and 201(1A) of Income tax Act, 1961 (hereinafter referred to as Act ) W.P. (C) 1163/2018 Page 1 of 4 against SeedWorks Singapore or act in any manner contrary to assurances/clarifications issued by respondent no.3. 3. alleged clarification/assurance given by respondent no.3 is stated to be contained in letter dated 01st July, 2020 issued by Joint Commissioner of Income Tax (OSD). relevant portion of said letter reads as under:- 2. In this regard it is clarified that since proceedings before DRP are still pending in case of company, assessee is eligible for availing itself of benefits of Vivad se Vishwas Scheme. If, company settles its dispute under VSV Scheme and pays taxes, proceedings u/s. 148 initiated against M/s. Wand Equity Portfolio II LP and M/s. Wand Affiliates Fund LP (WAND GROUP) shall be dropped since all proceedings pertain to same transaction and income from transaction should be taxed only once. Further, since re-assessment notices were issued to protect interest of Revenue and as per FAQ No 35, once taxes are paid by principal tax payer, appropriate order shall be passed and issued by Assessing officer to release other parties from any action under income tax act 1961 including payment of tax, interest and penalty, etc. 3. Since proceedings u/s. 201(1)/201(1A) of act initiated against M/s. Seed works Singapore relates to same transaction, as corollary, proceedings u/s. 201(1)/201(1A) of act shall be dropped, considering that company has paid requisite taxes under Vivad se Vishwas scheme. Accordingly no further action shall be taken against M/s. Seedworks Singapore under IT Act, 1961 and order shall be issued to M/s Seedworks, Singapore dropping proceedings. 4. Based on above clarification/assurances if company proceeds under VsV scheme, Department shall co-operate with company to withdraw/bring to close writ petition before Delhi and Hyderabad High Court and application before DRP. department shall also expeditiously bring end to all other proceedings and litigation as set out above. W.P. (C) 1163/2018 Page 2 of 4 4. Today, learned senior counsel for petitioner has shared letters dated 13th August, 2020 written by Joint Commissioner of Income Tax (OSD), International Taxation -2, Hyderabad to Wand Equity Portfolio II LP, Wand Affiliates Fund LP and SeedWorks Singapore Pte Ltd. said letters are taken on record. One such letter is reproduced hereinbelow:- To Wand Equity Portfolio II LP 260 Crandon Boulevard Suite, 32 # 75, Key Biscayne, Florida, USA-33149 Sir, Sub: Dropping of re-assessment proceedings u/s 147 of Income tax Act, 1961 (Act) for AY 2012-13, in your own case-Reg. Ref: Notice u/s 148 in File No. DCIT (IT)-2/148/2018-19 dated 06.07.2018. *** Kind reference is invited to above. subject proceedings were initiated to tax capital gains earned on sale of equity shares of SeedWorks India Private Limited, pursuant to ruling of Hon ble AAR dated 08 November 2017. subject notices were issued in addition to reassessment notice issued to SeedWorks Holdings Mauritius (SHM). SHM vide letter dated 25 June 2020 had sought certain clarification regarding Direct Tax Vivad Se Vishwa Act, 2020 (VSV Act). Among other clarifications, SHM sought clarity on status of reassessment proceedings initiated against you, since capital gains earned from same transaction is being sought to be taxed both in hands of SHM and you. In response dated 1 July 2020 to said letter, it was clarified that reassessment notice to you was issued to protect interest of Revenue. Further it was clarified that since proceeding pertain to same transaction and income from transaction shall be taxed only once, proceedings initiated against you shall be dropped, if SHM settled W.P. (C) 1163/2018 Page 3 of 4 tax dispute under VSV Act. This is in line with FAQ no 35 of VSV Act. This clarification was issued with prior approval of Commissioner of Income Tax (IT & TP), Hyd. SHM has filed application to settle tax dispute under VSV Act and has paid appropriate taxes. Given that appropriate taxes are paid on transaction, Assessing Officer is satisfied that no further taxes, interest or penalty, etc are owned or collectible from you in respect of aforesaid transaction. Hence, re-assessment proceedings initiated under Section 147 of Act are hereby dropped. 5. Issue notice. 6. Mr.G.C.Srivastava, Advocate accepts notice on behalf of Revenue Department. He states that re-assessment proceedings initiated against Wand Group as well as SeedWorks Singapore Pte Ltd. have already been dropped under Sections 147, 201(1) and 201(1A) of Act respectively. 7. Keeping in view aforesaid, present writ petition and application are disposed of as satisfied. Needless to state that, if any cause of action arises in future, petitioner shall be at liberty to file appropriate proceedings in accordance with law. 8. order be uploaded on website forthwith. Copy of order be also forwarded to learned counsel through e-mail. MANMOHAN, J SANJEEV NARULA, J SEPTEMBER 16, 2020 KA W.P. (C) 1163/2018 Page 4 of 4 Seedworks Holdings Mauritius v. Union of India & Or
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