TaxTMI 
TaxTMI 
2014 (1) TMI 657
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....red from error in allowing the deduction u/s 10B without considering the provisions of Section 10B(9) and therefore, the order passed by the Assessing Officer was erroneous and so far as the prejudicial to the interest of revenue. Accordingly, a show-cause notice dated 22.3.2012 u/s 263 was issued. After considering the reply and submissions of the assessee the Commissioner held that the ownership or beneficial interest in the assessee company was transferred and consequently in the assessment year 2003-04 the original promoters/shareholders of the company were not holding 51% of the voting power which is in violence of Sub-Section 9 of Section 10B as exists as relevant point of time for the assessment year 2003-04. Accordingly, the Commiss....
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....ribunal in assessee's own case for the assessment year 2006-07. On the other hand, the Ld. D.R has relied upon the impugned order of the Commissioner and submitted that the assessee has failed to establish the transfer of 1.5% of the allotted shares from subsidiary of the Altana Pharma AG. He has referred the relevant part of the impugned order and submitted that the re-transfer of 1.5% of the shares of the assessee company was not proved by the assessee as no instrument was brought on record to show the said transaction. The assessee has claimed the transfer by way of raising a credit note depicting the payment. Thus, the transfer of 1.5% of shares was not genuine. 4. We have considered the rival submissions and carefully perused the re....
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....rom the submission made by the Assessee Compnay that "a conscious decision was taken by way of abundant caution, to maintain 51% or more of the said shareholding pattern as it prevailed earlier". Reliance placed by the Assessee Company on the judgment of Honourable Income Tax Appellate Tribunal, Mumbai, 'G' Bench in the case of M/s WNS Global Services Pvt. Ltd. in ITA No. 2566/M/2009 are differentiated on facts on the ground that the said decision is on section 10A and the instant case is on section 10B. Secondly, the procedural improprieties notices in the instant case were not present in the said case before Honourable ITAT. 9. In view of the above, the Assessee Company will not be entitled to deduction u/s 10B of the Income Tax Act, 1....
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....g power in assessee company through its 100% subsidiary. Facts on record show that soon after the transfer of its share holding to its subsidiary w.e.f. 30.11.2002, it was advised to Altana Pharma AG that if it comes to be interpreted that there was a change of more than 51% of the share holding assessee company, on account of the aforesaid transfer, it could give rise to contentious issues and deprive the assessee company of the benefit of its claim u/s. 10B of the Act. Accordingly, to maintain 51% or more of the same share holding pattern as it prevailed earlier, the request for splitting up and subsequent transfer of 3,00,000 share was executed in February 2003. This is also exhibited clearly in share holding pattern mentioned herein abo....
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....espect of the change in shareholding which had taken place before March 2003." A perusal of this remand report clearly establishes that the share has been transferred before March 2003, interim dividend has been received by the transferee which has also been verified from the bank statements of Altana Pharma AG. As the Assessing Officer himself has verified such clinching evidences and has accepted them in order, therefore, in our considerate view we do not find any reason to hold that there was a change in ownership to the detriment of the assessee company vis-a-vis section 10B(9) of the Act. Considering all the facts relating to transfer and the remand report, we hold that the substantial share holding was always with the assessee at t....
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....h has been omitted from the statute w.e.f. 1st April 2004, has to be read to be obliterated from the statute book or at least it will not have any effect from the year in which it was omitted. Thus, even if there was any change in the ownership through acquisition of shares in earlier year 2003-04, exemption under section 10A, cannot be denied on this ground in the assessment year 2004-05. To this extent, the contentions of the learned Sr. Advocate are accepted. On the aforesaid conclusion, we hold that the assessment order passed by the Assessing Officer, which has been sought to be cancelled under section 263 is not erroneous in law." Respectfully following the decision of the Tribunal, we direct the Assessing Officer to allow deductio....