High Court of Delhi · Judgments and reasoned final orders
Commissioner of Income Tax (International Taxation)-3 v. Toshiba Corporation
ITA 60/2026 ·
Lack of jurisdiction of the Assessing Officer in proceedings under Sections 201(1) and 201(1A) to re-characterize a transaction of 'purchase of shares' from non-resident sellers (on which TDS was deducted and deposited at 10% plus surcharge) into a 'purchase of assets'.
1. FACTS OF THE CASE
Toshiba Corporation purchased shares from non-resident sellers (Sangista Kshetry, Hersh Kshetry, and Nina Kshetry) and deducted and deposited TDS at 10% plus surcharge on the consideration. By order dated 12.11.2021 under Section 201(1)/201(1A), the AO treated Toshiba as an assessee-in-default and raised an interest demand by re-characterizing the purchase of shares as a purchase of underlying assets requiring a higher rate of TDS. Both the CIT(A)-43 and the ITAT (order dated 26.07.2024) deleted the demand.
2. DISCUSSION BY THE COURT
The Division Bench agreed with the concurrent findings of the CIT(A)-43 and the ITAT that the AO had acted purely on surmises and conjectures in re-characterizing a documented sale of shares into a sale of assets. In proceedings relating to deduction of tax at source under Section 201(1)/(1A), where the assessee had deducted and deposited tax at 10% plus surcharge on the share purchase, the AO could not embark upon an exercise of holding that the transaction was in substance a purchase of assets.
3. JUDICIAL DECISION
Holding that no question of law arose out of the concurrent findings recorded by the two appellate authorities, the High Court dismissed the Revenue's appeal.
4. OUTCOME
Assessee - Revenue appeal dismissed; deletion of Section 201(1)/201(1A) TDS demand upheld.
5. AKHB REVIEW POINT
In Section 201(1)/(1A) withholding-tax proceedings, the TDS Assessing Officer lacks jurisdiction to pierce or re-characterize a share purchase agreement into an itemized asset sale where the payer has duly withheld tax applicable to capital gains on shares.
Source and verification
3-page official High Court of Delhi judgment PDF (DLHC011320292024_1_2026-01-28.pdf, 60,960 bytes).
Original PDF: 3 pages · SHA-256: 2835d8136f7e6ecb7f1dce2051e35c3bc266366f9c91833bc7715a5b0a361881
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Sections 195, 201(1), and 201(1A) of the Income-tax Act, 1961. Income-tax Act, 2025 equivalence is not verified.
Full 3-page primary judgment PDF text read and verified page-by-page. Affirms concurrent findings of CIT(A)-43 and ITAT Delhi Bench 'D' (order dated 26.07.2024) on limits of Section 201 jurisdiction.
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