TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 269
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant's case, the Hon'ble Commissioner of Income tax has grossly erred in considering the assessment order u/s. 153A r.w.s. 143(3) passed by the Ld. AO to be erroneous and prejudicial to the interest of the revenue and he erred in invoking the provisions of section 263 of the Act. 3. In law and in facts and circumstances of the appellant's case, the Hon'ble Commissioner of Income Tax has grossly erred in directing the de novo assessments by invoking the provisions of section 263. 4. In law and in facts and circumstances of the appellant's case, the Hon'ble Commissioner of Income Tax has grossly erred in invoking the provisions of section 263 merely based on the change of opinion. 5. In law and in facts and circumstances of the appellant's case, the Hon'ble Commissioner of Income Tax has grossly erred in not considering the fact that appellant company was liable to pay tax on its book profit u/s. 115JB and hence, there being no impact on the tax liability, the order passed by the ld AO can never be said to be prejudicial to the interest of the revenue. 6. The appellant craves lea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losses of M/s. Dolphin Laboratories Ltd., in return of AY 2006-07. The claim of such business losses amounts to Rs. 43,49,59,470/-. The AO has allowed the above claim of the assessee vide order us. 143(3)/153A dated 30.12.2009. The AO has also allowed the claim of unabsorbed depreciation of Dolphin Laboratories in AY 2006-07 and in AY 2007-08. Thus the total benefit availed by the assessee company as a result of amalgamation of Dolphin Laboratories is of Rs. 51,53,11326/-. In the reassessment proceedings, the AO would consider all the points as mentioned in the instant order and rework out allowable brought forward losses and depreciation (if any) in the case of assessee company. (ii) On verification of the scheme of rehabilitation of Dolphin Laboratories Ltd. before BIFR, it was noticed that the 'Cut of date' is 30/09/06 i.e. F.Y 2006-07 relevant to the AY 2007-08. The assessee has claimed business losses of Rs. 43,49,59,470/- in AY 2006-07 and while passing order u/s. 143(3) r.w.s. 153A of the Act the AO has allowed this claim. Apart from it the assessee has also claimed unabsorbed depreciation of Rs. 4,44,21,865/- and durin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lso verify and take note of the following points in reassessment proceedings:- (a) In pursuance of BIFR directions, the DIT (Recovery) has issued direction vide their letter No.2(1739)/DIT(R)/BIFR/2006-07/396 dated 28.04.2010. In these directions, the BIFR has clarified that "field authorities may take necessary action as per law in the light of fact that no relief and concession has been allowed to the sick company or healthy company by this Directorate beyond the provisions of IT Act." The AO should follow the directions of DIT(R). (b) As per the Scheme, the liabilities of loans from bank and creditors have been reduced from 11.39 crore to 3.90 crore. Whether the AO has verified and ascertained whether any order has been passed regarding the applicability of the provisions of Sec. 41(1) of Therefore, IT Act and the taxability of such remissions / waivers in the hands of the amalgamating company? (c) Whether the unabsorbed losses or depreciation was quantified by the Assessing Officer in the hands of M/s. DLL by way....
X X X X Extracts X X X X
X X X X Extracts X X X X
....13. It was submitted by him that as per the judgment of Hon'ble jurisdictional High Court, the amalgamation scheme shall be operative from the appointed date but shall become effective from the effective date. He submitted that in the present case also, the appointed date i.e., 01-01-2006 should be considered as the date of amalgamation and therefore, the order of ld. CIT is not justified and the assessment order is not erroneous on this aspect. 6. He placed reliance on several judgments in support of this contention that appointed date is valid and he also placed reliance on the same judgment of Hon'ble Supreme Court rendered in the case of Malabar Industrial Co. Ltd. (supra), in support of this contention that in the present case, the order of Ld. CIT u/s. 263 is not justified. 7. As against this, ld. CIT-DR supported the order of ld. CIT and also placed reliance on the following judicial pronouncements:- (i) CIT v. Infosys Technologies Ltd. (2012) 17 taxmann.com 203 (Kar) (ii) CIT v. Eastern Medikit Ltd. (2011) 12 taxmann.com 427 (Del) 8. We have considered the rival submissions, perused the material on record and gone throu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent of the account filed by the appellant in the absence of any supporting material and without making any inquiry. On these facts the conclusion that the order of the Income-tax Officer was erroneous is irresistible. We are, therefore, of the opinion that the High Court has rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified." 9. In the above para of the said judgment, Hon'ble Apex court has approved the judgment of Hon'ble High Court that if assessment order is passed in the absence of any supporting material and without making any inquiry, such assessment order is erroneous as well as prejudicial to the interest of Revenue and the exercise of jurisdiction by the Commissioner u/s. 263 of the Act was justified. In the present case also, it could not be shown by Ld. AR of the assessee that assessment order of DLL was available before the present Assessing Officer in course of assessment proceedings regarding quantification of unabsorbed losses and unabsorbed depreciation allowed to be carried forward by the Assessing Officer of DLL and which could be set off in the present assessment year in the hands of DLL as a consequence of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es of the appellant's case, the impugned order u/s. 263 is void and deserves to be cancelled, inter alia, for the reasons that it has been passed without application of mind. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT has grossly erred in law while passing such order u/s. 263 since the original assessment order is neither erroneous nor prejudicial to the interests of the Revenue. 3. In law and in the facts and circumstances of the appellant's case, the learned CIT has grossly erred in applying the judgment given in the case of Ranbaxy Laboratories Ltd. in the appellant's case, as the facts of the case on which the judgment has been given are completely different from that of the appellant insofar as, inter alia, the nature of transactions are concerned. 4. In law and in the facts and circumstances of the appellant's case, the learned CIT has grossly erred in interpreting the intent of Instruction No. 3 issued by the CBDT and thereby wrongly relying on the aspect that the Assessing Officer had not referred certain transactions to the TPO u/s. 92CA. &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assessee that Assessing Officer can redo the de novo assessment for International transaction only and he cannot disturb the other part of the assessment order. As against this, ld. CIT-DR of the Revenue supported the order passed by ld. CIT u/s. 263 of the Act. 16. We have considered the rival submission, perused the materials on record and gone through the order passed by ld. CIT u/s. 263 of the Act. We find that the relevant provision on the basis of which the jurisdiction is exercised by ld. CIT u/s. 263 of the Act is Section 92CA of the Act and therefore the same is reproduced below:- "92CA (1) Where any person, being the assessee, has entered into an international transaction [or specified domestic transaction] in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous approval of the Commissioner, refer the computation of the arm's length price in relation to the said international transaction [or specified domestic transaction] under section 92C to the Transfer Pricing Officer. (2) Where a reference is made under sub-section (1), the Transfer Pricing Offi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of June, 2007 but the order under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be made at any time before sixty days prior to the date on which the period of limitation referred to in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expirees.] [(4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of section 92C in conformity with the arm's length price as so determined by the Transfer Pricing Officer.] (5) With a view to rectifying any mistake apparent from the record, the Transfer Pricing Officer may amend any order passed by him under sub-section (3) , and the provisions of section 154 shall, so far as may be, apply accordingly. (6) Where any amendment is made by the Transfer Pricing Officer under sub-section (5), he shall send a copy o....