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IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH, D: NEW DELHI

BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER

AND

SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER

ITA No.- 4180/Del/2025

[Assessment Year: 2018-19]

Federal -Mogul Holdings, Ltd., Asst. Commissioner of Income

4^th Floor, Tower A, Tax,

Cybercity, Vs Circle Int. Tax 1(3)(1),

Ebene, Mauritius. E-2, Tower, Civic Centre,

Minto road, Delhi-110002

PAN- AABCF2977K

Assessee Revenue

Assessee by Shri Vivek Sarin, Adv.,

Shri Abhishek Jain, CA &

Shri Dhruv Dev Gupta, Adv.

Revenue by Shri M.S. Nethrapal, CIT(DR)

Date of Hearing 23.12.2025

Date of Pronouncement 23.12.2025

ORDER

PER BRAJESH KUMAR SINGH, AM:

This appeal has been preferred by the assessee against the order dated

02.04.2025 of the Commissioner of Income Tax (Appeal), Delhi-42 [hereinafter

referred to as the ‘Ld. CIT(A)] pertaining to Assessment Year 2018-19, arising out

ITA No.- 4180/Del/2025

Federal Mogul Holdings Ltd.

of rectification order dated 22.07.2024 passed under Section 154 of the Income-tax

Act, 1961(hereinafter referred to as ‘the Act’).

2. Brief facts of the case: The Assessee filed its return of income for A.Y. 2018-

19 on 30.11.2018 declaring income of Rs. 56,49,45,510/- and claiming a refund of

Rs. Nil/-. The Return was processed by CPC u/s 143(1) of the Act on 02.11.2019

resulting in a demand of Rs. 30,56,16,480/-. Further, rectification orders were passed

by CPC u/s 154 of the Income Tax Act, 1961 on 03.06.2020, 28.08.2020 &

29.09.2020 in which the demand was reduced to Rs. 7,64,04,110/-. Further, the

assessee submitted that during the year under consideration the assessee company

sold 7,40,30,312 unlisted equity shares of Federal-Mogul Powertrain Solution India

Private Limited to Federal-Mogul Investments BV for a total consideration of Rs.

1,39,02,89,259/- and capital gain (LTCG) on the said transaction was Rs.

56,49,45,513/- and said capital gains was not chargeable to tax in India. It was

further submitted that the transaction was concluded on the basis of a sale purchase

agreement dated September 21, 2017 and on the sale of the aforesaid 7,40,30,312

unlisted equity shares, the assessee had earned Long Term Capital Gains ('LTCG')

amounting to Rs. 56,49,45,513 which was declared in the return of income of Rs.

56,49,45,513/-. The assessee further stated that AO did not consider the fact that the

income earned on sale of equity shares as a long-term capital gain was not chargeable

to tax in India in accordance with the beneficial provisions of the India-Mauritius

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ITA No.- 4180/Del/2025

Federal Mogul Holdings Ltd.

Tax Treaty. Aggrieved with the said position, the assessee filed a rectification request

before the AO on 25.07.2023, submitting that during the subject AY assessee had

sold 7.40,30,312 unlisted equity shares of Federal-Mohul Powertrain Solution India

Private Limited to Federal-Mogul Investments BV for a total consideration of Rs.

1,39,02,89,259/- and capital gain (LTCG) on the said transaction was Rs.

56,49,45,513/- and said capital gains on the said sale was not chargeable to tax in

India.

2.1 However, the same was rejected by the AO for the reason that the assessee

itself has reported the amount of capital gain of Rs. 56,49,45,513/- as the total

amount of LTCG chargeable at special rates in India as per DTAA and hence, it was

not a mistake apparent from record and was outside the purview of section 154 of

the Act. The AO issued a show cause notice dated 07.06.2024 to assessee wherein

the assessee was show caused as to how the rectification request qualifies as a

mistake apparent from record and as to why request of assessee for rectification u/s

154 of the Act, should not be rejected. The AO further noted that in response to the

show cause notice dated 07.06.2024, the assessee submitted its response vide letter

dated 17.06.2024 and held that the response of the assessee was perused and was

found untenable.

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ITA No.- 4180/Del/2025

Federal Mogul Holdings Ltd.

2.2 The relevant extract of the order dated 22.07.2024 of the