ITA No. 4731/MUM/2023

Parties Involved

Facts Summary

Aries Agro Limited, a company engaged in the manufacturing and marketing of micronutrients, fertilizers, and food additives, filed an appeal against the Final Assessment Order passed by the Assessing Officer under Section 143(3) r.w.s. 144C(13) and Section 144B of the Income Tax Act, 1961. The appeal was against the addition of INR 1,03,26,939/- to the income of the appellant on account of notional interest on share application monies invested in its overseas subsidiary. The appellant argued that the share application monies were not interest-free loans but were in the nature of share capital. The appellant also contended that the delay in allotment of shares was due to the non-receipt of approval from the Sharjah Airport International Free Zone (SAIF Zone) Authority. The Tribunal had to decide whether the transaction should be treated as a loan transaction or as a remittance towards share application money.…

Legal Issues

• 1. Whether the transaction between the appellant and its overseas subsidiary should be treated as a loan transaction or as a remittance towards share application money.
• 2. Whether the delay in allotment of shares can be attributed to the appellant.

Judgment Outcome

Decided in favour of Assessee.

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