TaxTMI 
TaxTMI 
2011 (3) TMI 578
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....lp and Paper Board Products Ltd., (6) New Millennium Health Care Products and Equipments Ltd., got amalgamated with SKOL Breweries Ltd. We can call this first amalgamation 4. As on 1-4-2002, SKOL Breweries Ltd. Amalgamated with M/S. Morkutir Investments and Trading Company Private Ltd. Simultaneously the Beer Business of M/S.Maharastra Breweries Ltd. Demerged and merged with M/S. Morkutir Investments and Trading Company Private Ltd. We can call this second amalgamation. M/S. Morkutir Investments and Trading Company Private Ltd., later changed its name to M/S.SKOL Breweries Ltd. This happened on 22/5/2003. 5. The assessee company filed return of income for A.Y 2003-04 declaring business income at Rs. Nil. A perusal of the computation of income reveals that against the total income of Rs.6,54,53,103/- it set off carried forward business loss u/s. 72(1) of Rs.4,56,28,025/- and brought forward unabsorbed depreciation of Rs.1,98,24,078/- thus wiping of full profit. The computation of income does not show claim of any other loss/depreciation brought forward or carried forward by the assessee. The return was also accompanied by the tax audit report. As per it....
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....1983 2,501,615 4. 1983-1984 3,116,154 5. 1984-1985 3,926,651 6. 1985-1986 2,273,437 7. 1986-1987 2,827,965 8. 1987-1988 2,400,294 9. 1988-1989 457,356 10. 1989-1990 3,724,778 11. 1990-1991 1,954,795 12. 1991-1992 - 13. 1992-1993 - 23,425,969 14. 1993-1994 - 15. 1994-1995 1,657,254 7,807,268 16. 1995-1996 6,172,940 17. 1996-1997 20,145,481 10,298,590 18. 1997-1998 6,601,855 19. 1998-1999 2,263,656 36,348 20. 1999-2000 10,794,734 21. 2000.2001 7,062,297 45,104 22. 2001-2002 23,877,193 ....
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.... by the Assessee which was rejected by the AO. Apart from the above, the AO treated the allowance of set off allowed in the earlier year to erstwhile SKOL Breweries Ltd. deeming it as income u/s.72A(3). Thus these were two different and distinct issues. 12. The provisions of Sec.72-A which was the subject matter of the dispute reads as follows: 1* "72A. Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.- (1) Where there has been an amalgamation of a company owning an industrial undertaking or a ship with another company, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly. (2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not....
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....rietary concern is succeeded by a company fulfilling the conditions laid down in clause (xiv) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or allowance for depreciation of the successor company for the purpose of previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly: Provided that if any of the conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) to section 47 are not complied with, the set-off of loss or allowance of depreciation made in any previous year in the hands of the successor company, shall be deemed to be the income of the company chargeable to tax in the year in which such conditions are not complied with. (7) For the purposes of this section,- (a) "accumulated loss" means so much of the loss of the predecessor firm or the proprietary concern or the amalgamating company or ....
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....A of the Income Tax Act, 1961 ("Act") for the Assessment Year 2002-03 as its income for the Assessment year 2003-04 under section 72A(3) of the Act following the directions given by the Learned Commissioner of Income Tax (Appeals) [CIT(A)] in his order. 2.3 That on the facts and in the circumstances of the case and in law, the ld. A.O has erred in law in denying the carried forward losses and unabsorbed depreciation of Haryana Breweries Ltd., East Coast Breweries and Distilleries Ltd. and Charminar Breweries Ltd. (companies that amalgamated with SKOL Breweries Limited with effect from July 1, 2000) under section 72A of the Act. 2.4 That on the facts and in the circumstances of the case and in law, the ld. A.R has erred in law in denying set off of unabsorbed depreciation of Rs. 23,877,193 for the assessment year 2001-02 for erstwhile SKOL Breweries Ltd. under section 72A of the Act." 14. As can be seen ground No.2.1 to 2.3 relates to addition made by AO invoking Sec.72A(3) of the Act. While Ground No.2.4 relates to addition made by AO invoking Sec.72A(2). The common thread that runs through both the above grounds is the interpretation of Sec.72A(2) reg....
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....osses of Rs.4,11,61,355 and unabsorbed depreciation of Rs. 9,97,83,291 aggregating to Rs. 14,09,44,626/- of erstwhile SKOL Breweries Ltd." 3. It is respectfully submitted that, inadvertently on account of typographical error, the figure stated in the aforesaid ground No.3 of revised grounds of appeal was not correctly stated. It is submitted that, the claim of the appellant vis-à-vis the revised grounds of appeal is regarding the denial of carry forward and set off of unabsorbed business losses and, unabsorbed depreciation of Rs. 14,09,44,626/- instead of Rs.2,38,77,193. It is submitted that, the aforesaid sum of Rs. 14,09,44,626 comprises of unabsorbed business losses of Rs. 4,11,61,336 and unabsorbed depreciation of Rs. 9,97,83,291/-. 4. It is therefore, prayed that the aforesaid clarified ground may kindly be considered and adjudicated in the instant appeal." 16. The Hon'ble ITAT reversed the order of the CIT(A) and allowed ground No.3 as raised in the revised grounds of appeal. 17. In this M.A. the plea of the revenue is that vide Para 3 of ITAT's order the assessee has taken grounds of appeal that the CIT(A) erred in not allowing the ben....
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....in the AO has after due scrutiny of the details filed by the Assessee has held as follows: "The assessee was also asked to submit the details of business losses and unabsorbed depreciation of amalgamating companies along with documentary evidence to justify the same. The assessee submitted the details vide its letters dated 04/12/2009, 12.12.2009 and 17.12.2009 and the same are taken on record. From a perusal of the said details it emerges that out of the total loss of Rs. 14,09,44,626/- the assessee has only been able to produce documents for s. 1,202,51,164 and for the balance Rs.2,06,93,461/- no documents have been submitted by the assessee. Thus, the assessee is allowed depreciation in terms of the decision of Hon'ble ITAT of Rs. 12,02,51,164/-. Further out of the aforesaid amount of Rs. 12,02,51,164/- an amount of business losses and unabsorbed depreciation has already been allowed to be set off from the assessable income to the extent of Rs. 3,18,94,029/- while giving effect to the order of CIT(A) for the assessment year 2002-03 vide appeal effect order dated 23/1/2006. Accordingly the assessee is allowed the benefit of the balance business loss and unabsorbed depre....