DHR HOLDING INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME-TAX TDS, CIRCLE 74(1), DELHI & ORS.

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W.P.(C)/7521/2025HC DelhiDLHC01034765202528 May 2025Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court set aside the impugned intimation dated September 4, 2015, which had raised a demand of ₹76,82,220. The matter was restored to the Assessing Officer for a fresh consideration. The Court accepted the fair submission made by the Revenue's counsel to remand the case for re-examination of the quantum of interest payable by the petitioner. The reasoning was that the petitioner's liability, if any, was primarily related to the interest on the payment made, given that the recipient had offered the amount to tax. The Court did not decide on the specific interpretation of Section 201(1A) or the applicability of the Hindustan Coca Cola judgment but found the remand to be the appropriate course of action. The petition was disposed of with these directions.

What were the facts?

The petitioner, DHR Holding India Private Limited, filed a writ petition challenging a revised intimation dated September 4, 2015, which determined a demand of ₹76,82,220. The petitioner had paid ₹29,54,70,000 to M/s Lab India as non-compete fees under a Business Transfer Agreement dated November 11, 2021. M/s Lab India had offered this amount to tax in its return filed on September 29, 2012. The petitioner contended that tax had been paid and liability should be limited to interest on the payment from November 12, 2011, to September 29, 2012. The Revenue, through its counsel, agreed to set aside the demand and remand the matter for re-examination of the interest quantum.

What were the issues?

1. Whether the revised intimation dated September 4, 2015, determining a demand of ₹76,82,220 is contrary to the proviso to Section 201(1A) of the Income-Tax Act, 1961, and in violation of the Supreme Court judgment in Hindustan Coca Cola. Assessee's Contention: The petitioner argued that since the recipient, M/s Lab India, had offered the non-compete fee of ₹29,54,70,000 to tax and filed its return on September 29, 2012, the petitioner's liability should be limited to interest on the payment from November 12, 2011, to September 29, 2012. They asserted that the tax had been paid. Revenue's Contention: The Revenue, through its counsel, fairly stated that the impugned demand notice could be set aside and the matter remanded to the Assessing Officer to re-examine the assessment regarding the quantum of interest payable by the petitioner.

Which sections of the Income-tax Act were involved?

Section 201(1A)

AI-generated summary — verify with the full judgment below

$~84 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7521/2025 DHR HOLDING INDIA PRIVATE LIMITED .....Petitioner Through: Mr Manuj Sabharwal with Mr Drona Negi, Advocates. versus DEPUTY COMMISSIONER OF INCOME-TAX TDS, CIRCLE 74(1), DELHI & ORS. .....Respondents Through: Mr Sunil Agarwal, SSC with Ms Priya Sarkar, JSC. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 28.05.2025 CM APPL. 33607/2025 1. Exemption allowed, subject to all just exceptions. 2. The application is disposed of. W.P.(C) 7521/2025 3. Issue notice. The learned counsel appearing for the Revenue accepts notice. 4. The petitioner has filed the present petition, inter alia, praying as under: “a. Issue of a writ in the nature of certiorari or mandamus or other appropriate writ(s), order(s), direction(s) quashing the impugned demand of Rs. 76,82,220 determined vide revised intimation dated 04.09.2015 (Annexure P-1) being completely contrary to proviso to s. 201(1A) of the Income-Tax Act, 1961 and in violation of the judgment of the Supreme Court in Hindustan Coca Cola; b. Issue appropriate directions to the Respondents to not initiate any recovery proceedings in relation to the impugned demand of Rs 76,82,220.” This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 20:24:50

5.

The petitioner states that it had made a payment of ₹29,54,70,000/- to one M/s Lab India on account of non-compete fees under the Business Transfer Agreement dated 11.11.2021. The said entity M/s Lab India had filed its return of income on 29.09.2012 for Assessment Year [AY] 2012-13 and had offered the said amount to tax. Form 26A issued by an independent Chartered Accountant also establishes the same. It is the petitioner’s case that in view of the above at best the petitioner would be liable to pay interest on the amount of ₹29,54,70,000/- from 12.11.2011, being the date on which the payment was made, till 29.09.2012, being the date on which M/s Lab India had filed its return. It is also submitted that there is no cavil that the tax stands paid. 6. Mr Agarwal, the learned counsel appearing for the Revenue, fairly states that the impugned demand notice may be set aside and the matter be remanded to the Assessing Officer [AO] to re-examine the assessment regarding the quantum of interest payable by the petitioner. The said course commends itself to us. 7. We accordingly set aside the impugned intimation dated 04.09.2015 raising a demand of ₹76,82,220/- and restore the matter before the learned AO for consideration afresh. 8. The petition is disposed of with the aforesaid directions. VIBHU BAKHRU, J TEJAS KARIA, J MAY 28, 2025/tr Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 20:24:50

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