Delhi High Court Grants Relief To Sumitomo Mitsui In Rs 3,000 Crore Tax Case 

The high court also stayed the operation of the revenue department's order and tax demand arising from it as an interim measure.
<div class="paragraphs"><p>Delhi High Court. (Source: Website) </p></div>
Delhi High Court. (Source: Website)

The Delhi High Court granted interim protection to Sumitomo Mitsui Financial Group Inc. against a tax demand of over Rs 3,000 core. The case relates to a transaction where Sumitomo Mitsui purchased 74.9% equity in Fullerton India Credit Co. from two Singapore-based companies i.e., Angelica Investments Pte. and Fullerton Financial Holdings Pte.

The revenue department raised a tax demand holding Sumitomo Mitsui as a defaulter with regard to tax withholding obligation on the share purchase transaction. Senior Advocate Porus Kaka, appearing for Sumitomo Mitsui, highlighted that the order passed by the authorities based in Delhi is legally flawed since the jurisdiction was already assumed by the authorities in Mumbai and the Permanent Account Number of Sumitomo Mitsui was also registered with an address in Mumbai. He also clarified that the transaction was duly approved by the Reserve Bank of India and the Competition Commission of India.

SMFG Said to Face $670 Million Tax on Fullerton India Deal

The Delhi High Court’s tax bench comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju said the issue requires further consideration. It has granted time to the revenue department and the seller entities to file their replies. The high court also stayed the operation of the department's order and the tax demand arising from it as an interim measure. The matter will be heard next on April 26, 2023.

(Published in collaboration with Taxsutra)

Get Regular Updates