Appeal & Cross-Objection Dismissed on Assessment and Merger Issues

The ACIT Company Circle I (2) Coimbatore Versus M/s Precot Meridian Ltd (formerly M/s Meridian Industries Ltd.) and M/s Precot Meridian Ltd (formerly M/s Meridian Industries Ltd.) Versus The ACIT Company Circle I (2) Coimbatore

The ACIT Company Circle I (2) Coimbatore Versus M/s Precot Meridian Ltd (formerly M/s Meridian Industries Ltd.) and M/s Precot Meridian Ltd (formerly M/s ... Issues involved: Assessment u/s 143(3) for AY 2006-07, merger of companies, treatment of machinery replacement as revenue expenditure.

Assessment u/s 143(3) for AY 2006-07: The assessee, a company engaged in manufacturing and sale of various products, filed its return of income for the year declaring total income under normal computation and as per section 115JB. The Assessing Officer completed the assessment u/s 143(3) determining the income under normal computation. The assessee disputed the assessment framed in the name of a non-existing company, as it had already been merged with the assessee-company as per the order of the Hon'ble Madras High Court. The main issue was the treatment of replacement of machinery parts as revenue expenditure.

Merger of companies: The assessee contended that the assessment was framed in the name of a non-existing company as it had been merged with the assessee-company as per the order of the Hon'ble Madras High Court. The transferor company was dissolved being wound up. This issue was crucial in the appeal process.

Treatment of machinery replacement: The main issue revolved around the claim of replacement of machinery parts as revenue expenditure. The ld.AR submitted that similar issues were being restored to the file of the Assessing Officer in line with the direction of the Hon'ble Supreme Court. The Tribunal restored the appeal to the Assessing Officer with directions to decide the issue considering various judicial pronouncements.

Cross objection: The cross objection by the assessee was deemed premature due to the setting aside of the findings of the ld. CIT(A) and the Assessing Officer. However, the assessee was allowed to raise the issue at a later stage. The Tribunal dismissed the cross objection as premature but kept the issues raised open for future consideration.

Conclusion: The appeal of the Revenue and the cross objection of the assessee were both dismissed. The Tribunal pronounced the order on 30-08-2011, emphasizing the dismissal of both appeals.