TaxTMI 
TaxTMI 
2015 (2) TMI 1024
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....se and in law, the Ld.CIT(A) has incorrectly applied the provisions of section 72A(2) (a)(i) of the Income-tax Act, 1961. 2. That on the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance of Rs. 77,829/- being the employees' contribution to PF and ESI deposited after expiry of due date prescribed in the respective PF/ESI Acts. 3. That the appellant craves leave to add, modify, alter or rescind any of the grounds of appeal at the time of hearing of the case." 3. Apropos ground No.1 - Setting off of brought forward business loss and unabsorbed depreciation. 3.1. In this case the assessee is a private limited company engaged in the business of manufacturing & exporting of leather goods and manufacturing of pen tips and trading of pen tips. In this case vide order of Hon'ble High Court at Calcutta dated 6th July 2005, Surya Kiran Udyog Private Limited (amalgamating company) was amalgamated with the assessee company (amalgamated company) with effect from 01.04.2004. The assessee company has consolidated the account of Surya Kiran Udyog Private Limited with itself and a single return of income was filed for the year. During the year, the....
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....the plant. It is clear that M/s.Surya Kiran Udyog Pvt. Ltd., the amalgamating company was not engaged in the business, in which amalgamated loss occurred or depreciation was unabsorbed, for three years or more. Therefore, the assessee company is not entitled to claim set off of losses of M/.s.Surya Kiran Udyog Pvt. Ltd., the amalgamating company. 10. Also, the second condition mentioned above is not satisfied by the amalgamating company. From the assets as per Schedule of the Fixed Assets attached to the Return of Income for Assessment year 2003-04 as well as from assessee's submission dated 26- 12-2008, it is seen that the Book Value of assets held as on 01-04-2002 is Rs. 25,67,587/-. Whereas the value of assets as on 01-04-2004 is Rs. 6,75,08,461/-. For this reason, also the assessee company is not allowable to claim set off of Business Loss and Unabsorbed Depreciation of M/.s. Surya Kiran Udyog Pvt. Ltd., the amalgamated company. 11. As seen from the above, the only aim in amalgamation is to claim the benefit of losses of the amalgamating company. Therefore, the claim of set off of Brought Forward Business Loss and Brought Forward Unabsorbed depreciation amounting to Rs. 84,22....
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....ellant company two years prior to amalgamation was continuously being held upto the date of amalgamation. In the background of the discussions above, I hold that the appellant company was satisfying the conditions of Section 72A of Income Tax Act and thus was entitled to brought forward loss and unabsorbed deprecation of amalgamating company. Thus ground no.2 and ground no.3 are decided in the favour of the assessee." Against the above order the revenue is in appeal before us. 4. We have heard both the counsel and carefully perused the records. During the course of hearing it was put before the ld. Counsel of the assessee that the Hon'ble High Court's order relating to the amalgamation was with effect from 01.04.2004. In this view of the matter it cannot be said that the amalgamating company was engaged in the business for a period of three years or more as required by section 72A(2)(a)(i) of the Act so as to enable the amalgamating company to set off the brought forward loss and unabsorbed depreciation. To this the ld. Counsel of the assessee referred to the order of the Hon'ble High Court on the amalgamation. He referred to Schedule-A of the said order containing the definition ....
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....een filed with the Registrar." "393(4) Where default is made in complying with any of the requirements of this section, the company and every officer of the company who is in default, shall be punishable with fine, which may extend to fifty thousand rupees; and for the purpose of this sub-section any liquidator of the company and any trustee of a deed for securing the issue of debentures of the company shall be deemed to be an officer of the company: Provided that a person shall not be punishable under this sub-section if he shows that the default was due to the refusal of any other person, being a director, managing director, manager or trustee for debenture holders, to supply the necessary particulars as to his material interests." 6.2. We find that in this case the amalgamating company namely M/s.Surya Kiran Udyog Pvt. Ltd was incorporated on 13.09.2001. No particulars have been furnished in this regard as to since when the amalgamating company was engaged in the business. AO has observed that there was no business from the date of incorporation up to 31.03.2002 and the assessee was in the process of starting a plant. The brought forward depreciation is for A.Yrs.2003-04 and 2....
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....siness has commenced. In the present case no particulars have been furnished as from when the amalgamating company commenced its business. Neither the assessee has made any submissions in this regard, nor the ld. CIT(A) has given any finding in this regard. By no stretch of imagination the date of incorporation alone can be taken as the date that the business is commenced. As against the above the AO has given a finding that the amalgamating company was not engaged in any business from the date of incorporation up to 31.3.2002. Further the facts available on record only show that the unabsorbed deprecation and unabsorbed business loss was claimed from A.Yr.2003-04. Hence as per the details available on record there was no justification for the ld. CIT(A) to hold that the amalgamating company was engaged in the manufacturing of ball point pens for more than three years. Hence in our considered opinion since the ld. CIT(A)'s order is not based upon examination of the correct facts, and the material on record did not prove that the amalgamating company was engaged in the manufacturing of ball point pens for more than three years, in our considered opinion the order of the ld. CIT(A) t....