RBS AA HOLDINGS (NETHERLANDS) B.V.,NETHERLANDS vs. DCIT, CIRCLE- 3(1)(1) INT. TAXATION, NEW DELHI

The appeal preferred by the assessee is directed against the assessment order dated 19.07.2022 passed by the Income Tax Department, Circle Int. Tax 3(1)(1), Delhi u/s 143(3) read with section 144C(13)/144Bof the Income-tax Act, 1961 (for short ‘the Act”) for Assessment Year 2018-19 pursuant to the directions of the Dispute Resolution Panel u/s 144C(5) of the Act. 2. Brief facts of the case are, the assessee is a company incorporated in the 2 Netherlands and a tax resident thereof. During the financial year (FY) 2013-14, the assessee acquired 23,10,21,870 equity shares of an Indian entity i.e. RBS Prime Services (India) Private Limited (hereinafter referred to as “RBS Prime”) from another Netherland’s entity i.e. The Royal Bank of Scotland N.V. for a purchase consideration of Rs.300,86,48,195 (i.e. Rs.13.02 per share) pursuant to a share purchase agreement. RBS Prime surrendered its NBFC license in February 2017 and consequently ceased to do business in India. During the previous year relevant to the assessment year 2018-19, RBS Prime cancelled 14,67,69,790 equity shares held by the assessee under a scheme of reduction approved by National Company Law Tribunal (hereinafter referred to as “NCLT”) for a consideration of Rs.148,07,26,140 i.e. Rs.10.09 per share. The value of Rs.10.09 per share was determined per the valuation report submitted to NCLT, obtained in compliance with FEMA guidelines. The scheme of reduction became effective on 20thNovember 2017, when RBS Prime filed a certified copy of NCLT order sanctioning the scheme with the