HUNTSMAN INVESTMENTS (NETHERLANDS),MUMBAI vs. THE DY COMMISSIONER OF INCOME TAX INTERNATIONAL TAX CIRCLE-2(2)(2), MUMBAI, MUMBAI

Ground No. 5: Erroneous mention of refund already issued of Rs. 19.75.190 5.1. The learned AO erred in considering that refund is already granted to the Appellant whereasEach one of the above grounds of appeal is without prejudice to the other.”

2. The brief fact of the case is that the assessee is a nonresident company and incorporated under law of Netherlands and the company is a part of the Huntsman group. The Huntsman group is in the business of consumer goods and natural products and caters to various sectors like transportation, home life, construction, energy fuels, clothing and footwear products. During the impugned assessment year, the assessee filed return and offered capital gain income and income from other sources. During the impugned assessment year, the assessee company has sold shares of Huntsman Advanced Materials Solution Private Limited (HAMSPL) with other group companies vide share purchase agreement dated 28/29 October 2020. As per the share purchase agreement, the assessee company is holding 1,74,84,765 number of equity shares equal to 63.61% shareholding of HAMSPL. As per the share purchase agreement, the purchase consideration payable by the purchaser, M/s Pidilite Industries Ltd to the seller for the sale of share is fixed at USD 285 million plus cash balance USD 0.26 million Huntsman Investments (Netherlands) BV plus the refund consideration all are taken together as sale consideration. The notice was issued for initiating the assessment proceedings and it is found that 10% of the income was not taken during the impugned assessment year which is amount to Rs.131,18,91,783/- which is treated as deferred income. As per the assessee it is a contingent in nature and income received for 18 months so the next six months was taken in the next assessment year i.e. in A.Y. 2022-23. The assessee earned dividend also from the company amount to Rs.209,57,89,065/- and offered tax @5% in view of Most Favoured Nation (MFN) clause in the protocol to India Netherlands Treaty (DTAA) read with India Slovenia DTAA and the decree issued by the Netherlands accepting the lower tax rate applying MFN. The assessee has claimed lower tax @5% in view of Article 10(a) of India Slovenia DTAA, but the revenue has confirmed the tax @10% on dividend for the assesssee. The assessee further claimed the cost of acquisition will be increased. As per the assessee’s submission, the refund computation was filed and additional claim for cost of acquisition seems inadvertently lower cost was claimed in the return of income amount to Rs.2,62,50,000 shares was erroneously considered Rs.10 per share instead of Rs.56 per share. The assessee relied on circular No.14 (XL-35) of 1955, but in final assessment order, the assessee’s claim was rejected and deferred income was added back withthe total income of the assessee. Being aggrieved, the assessee filed an appeal before us.

Huntsman Investments (Netherlands) BV “4. Long term Capital gain on sale of shares: During the year under consideration, the assessee company has sold shares of Huntsman Advanced Materials Solution Private Limited(HAMSPL) with other group companies vide share purchase agreement dated 28/29 October, 2020. As per share purchase agreement, the assessee company is holding 17,484,765 number of Equity Share equal to 63.61% shareholding of HAMSPL. As per share purchase agreement, the purchase consideration payable by the purchaser to the sellers for the sale Share is fixed at US$285 million plus the Cash Balance plus US$0.26 million plus the Refund consideration(together, the sale consideration). Vide notice u/s. 142(1) of the Act, dated 12.12.2022, the assessee was asked to submit the working of sale consideration as per above method. The assessee filed its reply dated 20 December 2022 which is reproduced as below:

“As per clause 2.3 of the Share Purchase Agreement ('SPA') dated October 2020, sales consideration contains 2 components:

With regard to deferred consideration (i.e., point 2 above), the same is offered to tax in the subsequent assessment year (AY 2022-23) since the conditions in clause 2.6 and 2.7 were fulfilled in FY 2021-22. Copy of the ITR form for AY 2022-23 is enclosed at Annexure E which evidences that amount has been duly offered in the return of income.

Huntsman Investments (Netherlands) BV Further, in case where any income is payable to a person outside India in foreign currency, then such income needs to be converted into Indian Rupees as per telegraphic transfer buying rate of such currency as on the date on which the tax is required to be deducted as per Rule 115 read with Rule 26. For the purposes of the computation of capital gains, SBI U Buying Rate (1USD - INR 73.95) as on 03 November 2020 has been considered as tax is deducted by the buyer on this date."

4.1. The assessee vide submission dated 22.12.2022 uploaded its reply along with working of deferred consideration of USD1,77,40,254/-. On considering the submission of the assessee, show cause notice has been issued on 23.12.2022 which was duly served upon the assessee. Vide above show cause notice, the assessee was asked as to why deferred sale consideration of US$1,77,40,254/- should not be added to the total income of the assessee. The assessee has submitted its reply on 24.12.2022 & 26.12.2022.

5. The submission of the assessee has been considered but not found acceptable on the following grounds:

The assessee has relied upon the case of Hon'ble Bombay High Court CIT vs Mrs. Hemal Raju Shete and Hon'ble ITAT in the case of Universal Medicare(P) Ltd Vs Dy.CIT, CC-3(2), Mumbai. The facts of these case are different from this case. In the case of Hemal Raju Sethe the total consideration was capped at Rs.20Crore and based on not only the formula prescribed in the agreement but also performance of UNISOL's profit in future years also. The assessee has not received deferred consideration in the next F.Y. as per said formula. In the case of Universal Medicare (P) Ltd Vs Dy.CIT, CC-3(2), Mumbai, some amount was kept in Escrow account and payable in five equal instalment.

In this case, the total consideration is already determined and fixed. Even deferred consideration amount is also fixed as per agreement of share purchase dated 28/29.10.2020. Hence, in this case, the amount of total consideration is ascertained amount and thus the assessee has right to received the amount from the buyer. The test of accrual is whether there is a right to receive the amount though later and such right is legally enforceable. In this case, deferred consideration means the INR equivalent of US$28.1 million or the Realised Deferred Consideration, as the case may be, as per the foreign exchange

Huntsman Investments (Netherlands) BV conversion rate as per the Reserve Bank of India Reference Rate for Indian Rupee/1 US Dollar available on its website as of the closing date.

Further, the whole purchase consideration is considered by the assessee during A.Y. 2021-21 against the sale price during the year under consideration.

The share transfer has already completed during the A.Y. 2021-22 only and as per provision of sub-section 1 of section 45 of the Act, the transfer has been completed in A.Y. 2021-22 only.

Further, the assessee has received the deferred consideration on 18th May, 2021 which is much before the filing of return for A.Y. 2021-22. Hence, the total consideration including deferred consideration is already received by the assessee and assessee has to offer the same in A.Y.2021-22 as per provision of sub-section 1 of section 45 of the I.T.Act read with relevant DTAA. Hence in this case, deferred consideration is nothing but amount which was accrued to the assessee to be received in future period of 18 months only.

"Fair market value deemed to be full value of consideration in certain cases.

Huntsman Investments (Netherlands) BV 5OD Where the consideration received or accruing as a result of the transfer of a capital asset by an assessee is not ascertainable or cannot be determined, then, for the purpose of computing income chargeable to tax as capital gains, the fair market value of the said asset on the date of transfer shall be deemed to be the full value of the consideration received or accruing as a result of such transfer."

The plain reading of the above provision amply clarifies that even in cases of non-ascertainable and non-determined consideration, the fair market value of the said asset shall be deemed to be the full value of the consideration received or accruing as a result of such transfer.”

Huntsman Investments (Netherlands) BV 2.3 The purchase consideration payable by the Purchaser to the Sellers for the Sale Shares shall be US$285 million plus the Cash Balance plus US$0.26 million plus the Refund Consideration (together, the Sale Consideration) of which:

(a) the Closing Date Consideration shall be paid by the Purchaser to the Sellers on the Closing Date in accordance with Clause 5.2(a); and (b) the Total Deferred Consideration shall be paid by the Purchaser to the Sellers, subject to Clause 2.6 and in accordance with Clause 2.7 below, within 18 months of the date of this Agreement (the Deferred Consideration Period), in the proportion set forth in Schedule 5.

2.4 The Company shall prepare, and the Purchaser shall procure that the Company prepares, Revenue certificates (the Revenue Certificates) in the format provided in Schedule 14, each month following the Closing Date, each six-month rolling period within the Deferred Consideration Period starting from the date following the Closing Date, unless the Closing Date falls within the first 21 days of a calendar month, in which case starting from the first day of such calendar month in which Closing occurs (each such period, the Revenue Period), specifying in each such Revenue Certificate, the Company's Revenue for the relevant Revenue Period multiplied by two, and provide such Revenue Certificates to the Sellers within three Business Days of the end of each month (Date of Revenue Certificate). By way of illustration, the Company shall be required to obtain its first Revenue Certificate at the end of the first month from the Closing Date or the first date of the month in which Closing occurs, as the case may be, and subsequently each month thereafter and the Revenue Period shall begin after six months following Closing and continue for each subsequent rolling six-month period. The Revenue Certificates shall be determined and finally agreed between the parties in accordance with Schedule 13.

2.5 The Company shall, and the Purchaser shall procure that the Company shall, promptly upon Closing, and in any event no later than 30 Business Days from the Closing Date, inform the Sellers of the amounts calculated as the Refund Consideration as verified by the Tax Advisor.

2.6 The Total Deferred Consideration shall be paid by the Purchaser to the Sellers subject to the following (also as further illustrated in Schedule 15):

Huntsman Investments (Netherlands) BV (a) If in any of the Revenue Periods, the calculated Revenue reflected in the agreed Revenue Certificate for such Revenue Period is equal to, or exceeds, the 2019 Revenue, the Purchaser shall pay 100 per cent, of the Deferred Consideration to the Sellers within three Business Days of the relevant Acceptance Date or the Decision Date, whichever is later, in accordance with Clause 2.7; (b) If in all of the Revenue Periods, the calculated Revenue reflected in the agreed Revenue Certificate for such Revenue Period is lower than the 2019 Revenue, the Deferred Consideration pay-out shall occur at the end of the Deferred Consideration Period in accordance with the provisions of sub-clauses (c) and (d) of this Clause 2.6 below; (c) If at the end of the Actual Consideration Longstop Date, the calculated Revenue reflected in any of the agreed Revenue Certificates does not exceed the Target Revenue, the Purchaser shall not be obligated to pay any portion of the Deferred Consideration to the Sellers; (d) If at the end of the Actual Consideration Longstop Date, any one or more of the agreed Revenue Certificates reflects Revenues higher than the Target Revenue but lower than the 2019 Revenue, the Revenue Certificate with the highest Revenue value (such value, the Highest Revenue and such Revenue Certificate, Vv.^. the Highest Revenue Certificate] will be utilised for the calculation of the Realised Deferred Consideration, which will be paid by the Purchaser to the Sellers within 11 Business Days of the end of the Actual Consideration Longstop Date or three Business Days of the Decision Date, whichever is later, I but in any event before the expiry of the Deferred Consideration Period, in accordance with Clause 2.7; or (e) Notwithstanding the above, the Purchaser shall pay the Sellers the amount equivalent to the Refund Consideration, if any, within three Business Days of the Actual Consideration Longstop Date.”

Huntsman Investments (Netherlands) BV 6. The Ld.AR respectfully relied on the following judgements: - 6.1 Commissioner of Income-tax-8, Mumbai vs Mrs. Hemal Raju Shete (2016) 68 taxmann.com 319 (Bombay): “8. In the present case, from the reading of the above clauses of the agreement the deferred consideration is payable over a period of four years i.e. 2006-07, 2007-08, 2008-09 and 2009-10. Further the formula prescribed in the agreement itself makes it clear that the deferred consideration to be received by the respondent-assessee in the four years would be dependent upon the profits made by M/s. Unisol in each of the years. Thus in case M/s. Unisol does not make net profit in terms of the formula for the year under consideration for payment of deferred consideration then no amount would be payable to the respondent- assessee as deferred consideration. The consideration of Rs.20 crores is not an assured consideration to be received by the Shete family. It is only the maximum that could be received. Therefore, it is not a case where any consideration out of Rs.20 crores or part thereof (after reducing Rs.2.70 crores) has been received or has accrued to the respondent- assessee. As observed by the Apex Court in Morvi Industries Ltd. v. C7T [19711 82 ITR 835. "The income can be said to accrue when it becomes due.... The moment the income accrues, theassessee gets vested right to claim that amount, even though not immediately." In fact the application of the formula in the agreement dated 25th January, 2006 itself makes the amount which is receivable as deferred consideration contingent upon the profits of M/s. Unisol and not an ascertained amount. Thus in the subject assessment year no right to claim any particular amount gets vested in the hands of the respondent- assessee. Therefore, entire amount of Rs.20 crores which is sought to be taxed by the Assessing Officer is not the amount which has accrued to the respondent- assessee. The test of accrual is whether there is a right to receive the amount though later and such right is legally enforceable. In fact, as observed by the Supreme Court in E.D. Sassoon & Co. Ltd. v. CIT [19541 26 ITR 27 "It is clear therefore that income may accrue to an assesee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in present! solvendum in futuro .... .... ....".

Huntsman Investments (Netherlands) BV In this case allthe co-owners of the shares of M/s. Unisol have no right in the subject assessment year to receive Rs.20 crores but that is the maximum which could be received by them. This amount which could be received as deferred consideration is dependent/contingent upon certain uncertain events, therefore, it cannot be said to have accrued to the respondent-assessee. The Tribunal in the impugned order has correctly held that what has to be taxed is the amount received or accrued and not any notional or hypothetical income. As observed by the Apex Court in CIT v. Shoorji Vallabhdas & Co. [19621 46 ITR 144 "Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which liability to tax is attracted, viz., the accrual of its income or its receipt; but the substance of the matter is income, if income does not result, there cannot be a tax, even though in book-keeping an entry is made about a hypothetical income, which does not materialize." In this case Rs.20 crores cap in the agreement is not income in the subject assessment year. It has been observed by the Apex Court in the case of KP. Varghese v. 1TO [19811 131 ITR 59.7/7 Taxman 13 that one has to read capital gain provision along with computation provision and the starting point of the computation is "the full value of the consideration received or accruing". In this case the amount of Rs.20 crores is neither received nor it has accrued to the respondent-assessee during the subject assessment year. We are informed that for the subsequent assessment year (save Assessment Year 2007-08 for which there is no deferred consideration on application of formula), the Assessee has offered to tax the amounts which have been received on the application of formula provided in the agreement dated 25th January, 2006 pertaining to the transfer of shares.

Huntsman Investments (Netherlands) BV 10. In the above view there could be no occasion to bring the maximum amount of Rs. 20 crores, which could be received as deferred consideration to tax in the subject assessment year as it had not accrued to the respondent-assessee.

6.2 The ld. AR further relied on the Universal Medical (P) Ltd vs Deputy Commissioner of Income-tax, Central Circle-3(21), Mumbai (2020) 119 taxmann.com 377 (Mumbai – Trib.): - “32. We have perused the various clauses which are referred and relied by respective parties of business purchase agreement dated 24-8-2011, supply agreement which is schedule to the business purchase agreement and Escrow Account agreement dated 28-10-2011. Perusal of aforesaid clauses of business purchase agreement, the clauses of supply agreement (annexure to BPA) and Escrow Agreement demonstrate the maintaining of Escrow Account was inconsequence of business purchase agreement. The conditions of supp] agreement cannot be delinked from business purchase agreement dated 24-8- 2011. The Escrow Agreement was executed on 28-10-2011. The Escrow account agreement was executed in furtherance of BPA. Further the amount in Escrow Account would accrue to the assessee only on fulfillment of certain condition. Further, joint reading of clause 7.3 and clause 7.4 shows that if the condition mentioned in clause 7.3 is not fulfilled, then business purchase agreement will be terminated. Thus, the deposit in Escrow Account is intrinsic ar integral to the transfer of marketing division under business purchase agreement without it, the sale shall incomplete. Further, clause 3.1 and clause 3.9 is prescribed that assessee and the purchaser shall enter into agreement for the supply by the seller of pharmaceutical product that is manufactured by assessee. A draft of supply

Huntsman Investments (Netherlands) BV agreement was also prepared as a part of business purchase agreement as a schedule to the agreement.

Huntsman Investments (Netherlands) BV 7. The ld.DR vehemently argued and first mentioned that 90% of the income was declared during the impugned assessment year and only 10% of the income was taken in the next year. But the shares were purchased in A.Y. 20-21 and sale was concluded in the impugned assessment year. So, section 45(1) of the Act is duly implemented for the year of transfer, the amount should be taken. Related to dividend income, the Ld.DR fully objected to the reduction of tax rate. But related to revolving the cost of acquisition of shares, the Ld.DR had not made any strong objection against this issue. The ld. DR argued that the verification was not proper during the assessment proceedings. But ld. DR has not been able to submit any contrary judgment against submission of the ld. AR. The ld. DR relied on the order of DRP. The relevant paragraphs are reproduced as below: - “10.11 While the learned AO has correctly noted (at para 5 of the draft assessment order) that "The test of accrual is whether there is a right to receive the amount though later and such right is legally enforceable." the conclusions drawn are entirely incorrect and based on misconceptions / incorrect application of facts and law.

10.12 Further, the learned AO has noted (at para 5 of the draft assessment order) the following aspects for concluding that the deferred consideration should be taxed in the captioned year i.e., AY 2021-22:

 the assessee has claimed entire purchase consideration during the year  the share transfer has completed during the year;

Huntsman Investments (Netherlands) BV  the deferred consideration was received on 18 May 2021 which is before filing of return for AY 2021-22.

10.13 The assessee submits that the conclusions drawn by the learned AO based on the above are entirely misplaced. In this regard, the assessee submits as under:

There is no dispute that the share transfer was undertaken and completed during the captioned year i.e., AY 2021-22. On this basis, the assessee correctly claimed the entire purchase consideration while computing capital gains for AY 2021-22. The assessee also correctly offered full value of sales consideration i.e., entire sales consideration, excluding the 'deferred (contingent) consideration' since the conditions were not met during AY 2021-22.

As of 31 March 2021, the deferred (contingent) consideration had not accrued to the assessee. The assessee did not have any definite right to receive the amount, since it was subject to conditions as per SPA, which were dependent on the performance levels of Huntsman Advanced Materials Solutions Private Limited (as explained in paras 10.7 and 10.10 above).

Only upon fulfilment of the conditions in FY 2021-22 (i.e. AY 2022-23), the assessee became entitled to receive the 'deferred consideration'. Till such time, the amount did not accrue to the assessee.

Receipt of deferred consideration prior to filing return of AY 2021-22 cannot determine the year of taxability. The year of taxability depends upon accrual of a legally enforceable right to the consideration - this right arose, accrued and crystallised only in FY 2021-22 i.e. AY 2022-23, when the performance conditions

Huntsman Investments (Netherlands) BV as per SPA were met. It did not exist as of 31 March 2021 nor was money received as of 31 March 2021.

Thus, during the captioned year i.e., AY 2021-22, neither did the 'deferred (contingent) consideration' accrue to the assessee nor was it received.

Subsequent accrual and receipt in the next FY (i.e. AY 2022-23), upon fulfilment of conditions in the next FY, cannot determine taxability in the preceding FY (i.e. AY 2021-22). If such method is adopted for contingent consideration, in general taxpayers will never be in a position to determine and discharge advance tax since it will be impossible to determine income for the year even as of year-end i.e., by 31 March.

As of 31 March 2021 (i.e. year end for AY 2021-22), the assessee  Did not have a legally enforceable right to receive the 'deferred (contingent) consideration'

 Could not have claimed cost partially in A Y 202 1-22 since (I) no portion of the shares remained to be transferred in later years; and even otherwise (ii) if the conditions as per formula in SPA were not met in later years, deferred consideration would not be receivable by the assessee and there would have been no occasion to claim cost.

In view of the above, the assessee has correctly offered the 'deferred (contingent) consideration' to tax in AY 2022-23. Against this, the assessee has not claimed any further cost of acquisition, having a/ready claimed it in A Y 2021-22. Further, the buyer has deducted taxes from the 'deferred (contingent) consideration' in AY 2022-23. The assessee has claimed credit thereof in AY 2022-23.

Huntsman Investments (Netherlands) BV 10.14 Accordingly, the assessee submits that deferred (contingent) consideration cannot be brought to tax in the captioned AY. 10.15 Without prejudice, the assessee submits that if the deferred (contingent) consideration is to be taxed in AY 2021-22, corresponding credit needs to be given in A Y 2021-22 for the taxes deducted thereon by the buyer amounting to Rs. 14,33,14,056.

5.2 Discussion and Direction of the DRP:

5.2.1 The Panel has considered the content of the objection, the submissions made by the Ld.AR, the stance of the Ld.AO in his draft assessment order and the argument made by the Ld.AR during the hearing of the case.

5.2.2 The Panel notes that the AO is justified in taxing the deferred consideration in the instant assessment year. According to the AO the total consideration is already determined and fixed. Therefore, the 'test of accrual', wherein the right to receive the amount is created, applies in this case.”

Huntsman Investments (Netherlands) BV

Huntsman Investments (Netherlands) BV The said transfer by the assessee has given rise to long term capital gains in the hands of the assessee. The criteria is fixed for selling of shares as per SPA. The present dispute has arisen because, as per the SPA, the aggregate consideration of USD 285 million has been bifurcated into two components being the 'Closing Date Consideration' of USD 256.9 million and the 'Deferred consideration' of USD 28.1 million. In this regard, clause 2.3 of the SPA is reproduced hereunder for ease of reference: “2.3 The purchase consideration payable by the Purchaser to the Sellers for the Sale Share shall be US$285 million plus the Cash Balance plus US$0.26 million plus the Refund Consideration together, the Sale Consideration of which:

(a) The Closing Date Consideration shall be paid by the Purchaser to the Sellers on the Closing Date in accordance with Clause 5.2(a); and (b) The Total Deferred Consideration shall be paid by the Purchaser to the Sellers, subject to Clause 2.6 and in accordance with Clause 2.7 below, within 18 months of the date of this Agreement (the Deferred Consideration Period), in the proportion set forth in Schedue 5.”

For the aforesaid purpose, the meaning of the 'Closing Date Consideration' and the 'Deferred Consideration' which are also reproduced hereunder: “Closing Date Consideration means US$256.0 million).plus the Cash Balance plusUS$0.26 million; Deferral Considerationmeans the INR equivalent of US$28. 1 million the realised Deferred Consideration, as the case may be, as per the foreign exchange conversion rate as per the Reserve Bank of India Reference Rate for Indian Rupee/I US Dollar available on its website as of the Closing Date:”

The entire transaction of assessee is regulating by working of closing date consideration as attributable to the assessee as per SPA. The said consideration

Huntsman Investments (Netherlands) BV has been offered for tax as long-term capital gain for the year under consideration i.e., AY 2021-22 and is not in dispute.Insofar as the deferred consideration is concerned, clause 2.6 of the SPA is relevant as mentioned above in paragraph 5 of the order. if in all the Revenue Periods, the Revenue reflected in the agreed Revenue certificate for such Revenue period was lower than the 2019 Revenue, the deferred consideration payout/if any, shall occur at the end of the deferred consideration period in accordance with sub-clause(c) and (d) of the said clause 2.6. As per clause 2.6 (c) if the Revenue reflected in the agreed Revenue Certificate did not exceed the Target Revenue, the Purchaser shall not be obligated to pay any portion of the deferred consideration to the Sellers. If this contingency occurs, then the assessee would not receive any part of the deferred consideration. Hence, it is not merely the point of time and quantum of consideration but also the right to receive deferred consideration which was contingent. As per SPA clause 2.6(d), if during this period any one or more of the agreed Revenue Certificates reflects Revenue higher than the Target Revenue but lower than the 2019 Revenue, then, the manner of determination of the quantum of deferred consideration and its time of accrual shall be as prescribed therein. We find that as per section 45 of the Act, any profits or gains arising from the transfer of a capital asset shall be chargeable to income-tax in the previous year in which the transfer took place, such capital gains has to be computed as per section 48 of the Act. It is well settled by now that, the charging provision and the computation provision has to be read together. A bare perusal of section 48 shows that such income has to be computed by deducting from the "full value of consideration received or accrued as a result of the transfer of the capital asset"

Huntsman Investments (Netherlands) BV the specified heads of expenses/cost as provided therein. Therefore, what is relevant is the full value of consideration 'received' or 'accruing' as a result of the transfer. In the present case, it is an admitted position that the deferred consideration was not received during the previous year relevant to AY 2021-22. Hence, the issue is whether such consideration could be regarded as accrued during the said year. The stage of 'accrual1 is reached only when the assessee has a legally enforceable right to receive the said amount. In the present case, as explained in greater detail hereinabove, the deferred consideration was contingent on achievement of Revenue in excess of the Target Revenue/ the 2019 Revenue by HAMSPL. If the said event had not occurred, the assessee would not be entitled to any deferred consideration. In our considered view that the ld. AO has erred in not appreciating the deferred (contingent) consideration was contingent in nature and accrued only in the AY 2022-23. We respectfully relied on the order of the jurisdictional High Court in the case of Mrs.Hemal Raju Shete (supra) and order of Coordinate bench in the case of Universal Medical (P) Ltd(supra). So, the ground of the assessee succeeded. Accordingly, the appeal of the assessee in Ground no 1.1 is allowed.

8.2. Related to grant of credit of Rs.14,33,14,056/- being the TDS relatable to the deferred consideration which has been presently claimed and allowed in AY 2022- 23. The ld. AR mentioned this ground as alternative ground in referred to ground 1.1. Currently, the ground 1.2 is infructuous. Accordingly, the appeal of the assessee in Ground No. 1.2 is dismissed as in infructuous.

Huntsman Investments (Netherlands) BV 8.3. The grievance of the assess for adopting of the correct cost of acquisition of shares i.e. cost of Rs.56 per share has been erroneously taken as Rs.10 per share as there was a mistake in the computation of income with respect to the cost of acquisition of shares acquired on 05.05.2012. In argument the ld. AR submitted the documents against it’s claim. The said is fully technical. We remand back the matter to the file of the ld. AO for considering the claim of the assessee related cost of share Rs. 56/-. Accordingly, the appeal of the assessee in Ground No. 2.1 is allowed for statistical purposes. 8.4. The ld. AR agitated the issue related to incorrect computation of the tax, surcharge and education cess. Further mentioned about erroneous levy of interest under sections 234A and 234B of Act. The ld. AR argued that erroneous mention of refund already issued as Rs.19,75,190. The said issues are consequential is nature. We remand back the matter to the file of the ld. AO for reconsideration the issue agitated by the assessee and the assessee should get the reasonable opportunity of hearing.

Accordingly, the appeal of the assessee in Ground Nos. 3, 4 & 5 are allowed for statistical purposes.

8.5. The ld. AR has agitated the Additional Ground application of the Most Favoured Nation clause in the Protocol to the Double Taxation Avoidance Agreement (the DTAA) between the Government of India and the Government of Netherlands and consequent, charging of dividend income to tax at the rate of 5% as per a later DTAA between India and Slovenia. The ld. AR respectfully relied on Huntsman Investments (Netherlands) BV the order of NTPC Ltd vs. CIT (1998) 229 ITR 383 (SC) related to admission of additional ground. The assessee earned dividend amount to Rs.209,57,89,065/- and offered tax @5% in view of Most Favoured Nation (MFN) clause in the protocol to India Netherlands Treaty (DTAA) read with India Slovenia DTAA and the decree issued by the Netherlands accepting the lower tax rate applying MFN. The revenue has imposed tax @10% on dividend income and accordingly the DRP had taken the view against the assessee. But the assessee is interested in arguing the matter further before the ld. AO. The ld. DR had not made any strong objection against the assessee. So, we admit the additional ground of the assessee and we remand the matter back to the file of the ld. AO for adjudication denovo.