TaxTMI 
TaxTMI 
2015 (12) TMI 512
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....also part of the sales already offered in the earlier year. Therefore, the same qualifies for written off under Section 36(1)(vii) read with Section 36(2) of the Income-tax Act, 1961 (in short 'the Act'). The Ld. representative further submitted that the work-in-progress to the extent of Rs. 1,94,12,871/- was also written off in the books of account. Since the project could not be completed as contemplated by the company, the project was abandoned, therefore, the expenditure incurred by the assessee, namely, the work-in-progress for the project abandoned has to be allowed as revenue expenditure either under Section 28 or under Section 37 of the Act. Referring to the inoperative bank account to the extent of Rs. 10,000/-, the Ld. representative submitted that this also forms part of income of the assessee, therefore, it cannot be disallowed. 4. On the contrary, Shri P.B. Sekaran, the Ld. Departmental Representative, submitted that the CIT(Appeals) called for remand report from the Assessing Officer. The Assessing Officer clarified that in respect of receivable to the extent of Rs. 1,76,13,603/-, the assessee has not furnished any evidence either before the Assessing Offic....
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.... debts is dismissed as not pressed. 9. The next ground of appeal is with regard to addition made by the Assessing Officer to the extent of Rs. 31,07,20,000/- under Section 69A of the Act. 10. Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the assessee purchased the property in the assessment year 2008-09 and sold the same in the very same assessment year. The assessee offered the profit on sale of the land under the head "short term capital gains" in the return of income. The Ld. representative submitted that a copy of the return filed by the assessee is available at pages 1 to 4 of the paper-book. The Ld. representative further submitted that the agreement for sale of the property and power of attorney was dated 4.2.2008, a copy of which is available at pages 7-12 of the paper-book. The sale deed dated 28.03.2008 is available in pages 13 to 28 of the paper-book. Since the property was purchased and sold in the very same assessment year, it was not reflected in the fixed asset schedule and in depreciation statement. The Ld. representative further submitted that both the authorities below failed to appreciate the fact that once the property was so....
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....ils before the lower authorities. The CIT(Appeals) further found that the date on which the advance was received as well as the balance amount was received were not reflected in the books of the assessee-company. The CIT(Appeals) also found that unless and until the assessee furnishes the details of the transaction of sale made to M/s Arihant Hospitality (Chennai) Private Limited for a consideration of Rs. 31,07,20,000/-, it cannot be decided with regard to the actual amount received by the assessee at the end of the transaction. In the absence of any details, the addition made by the Assessing Officer under Section 69A of the Act was confirmed by the CIT(Appeals). We have gone through the agreement said to be entered between M/s AGS Properties Development (India) Pvt. Ltd. and the assessee-company on 04.02.2008. The assessee agreed to purchase the property for a total consideration of Rs. 16,26,00,084/-. A copy of the sale deed is available at pages 13 to 28 of the paper-book shows that M/s AGS Properties Development (India) Pvt. Ltd. in fact executed a sale deed through their power of attorney agent in favour of Arihant Hospitality (Chennai) Pvt. Ltd. for a total consideration of....
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....ged in the business of infrastructure development. In the course of assessment proceedings, the Assessing Officer found that the assessee has received a sum of Rs. 377,71,78,316/- from M/s Platex Limited incorporated in Mauritius. The assessee claimed before the Assessing Officer that the Mauritius company M/s Platex Limited invested the above sum of Rs. 377,71,78,316/- by way of foreign direct investment for subscription towards convertible debentures. The assessee was asked to produce the creditworthiness of M/s Platex Limited, Mauritius and genuineness of transaction. The assessee-company has produced only provisional accounts of M/s Platex Ltd., Mauritius for the financial year 2007-08. The provisional accounts produced by the assessee does not support the claim of the assessee that it has received Rs. 377,71,78,316/- from M/s Platex Ltd., Mauritius. The Ld. D.R. further submitted that M/s Platex Ltd., Mauritius was carrying on its business on the borrowed funds from Deutsche Bank. M/s Platex Ltd., Mauritius did not have any surplus fund to make investment in assessee-company. Since the M/s Platex Ltd., Mauritius had no source in making investment, the Assessing Officer found t....
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....t, while considering the issue, the Hyderabad Bench of this Tribunal in I.T.A. No.1159/Hyd/2010 dated 31.07.02013 found that when M/s PVP Enterprises Pvt. Ltd. merged with the assessee-company by way of amalgamation, from the date of amalgamation, the assessment has to be made in the hands of the assessee-company at Chennai. After merger, M/s PVP Enterprises Pvt. Ltd. has no independent existence. Therefore, it has to be assessed at Chennai in the name of PVP Ventures Ltd. Therefore, the Hyderabad Bench found that the order passed by the Addl. Director of Income Tax (International Taxation) is without authority. Accordingly, it was annulled. 19. In view of the above, according to the Ld. D.R., the CIT(Appeals) is not justified in observing that the assessment has to be made in the hands of M/s PVP Enterprises Pvt. Ltd. and not in the hands of the assessee-company. Therefore, the Ld. D.R. submitted that the order of the CIT(Appeals) cannot be upheld in the eye of law. 20. On the contrary, Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that M/s PVP Ventures Pvt. Ltd. was a private limited company assessed in Hyderabad. Deutsche Bank, Singapore, sanction....
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....td., the predecessor-company of the assessee, received credit from M/s Platex Ltd., Mauritius through Deutsche Bank to the extent of Rs. 40,87,50,000/-. A similar credit was received subsequently. Therefore, all transactions were received by M/s PVP Ventures Pvt. Ltd. from M/s Platex Ltd., Mauritius. Hence, the transactions are genuine. The source for making investment in M/s PVP Ventures Pvt. Ltd. was the loan borrowed by M/s Platex Ltd., Mauritius from Deutsche Bank. Therefore, according to the Ld. representative, the assessee has discharged its onus by proving that the entire credit of Rs. 377,71,78,316/- was the loan received by M/s Platex Ltd., Mauritius from Deutsche Bank. If genuineness of the transaction, namely, the receipt of loan is doubted, according to the Ld. representative, at the best the addition could be made only in the hands of M/s PVP Ventures Pvt. Ltd., since the loan was admittedly received by M/s PVP Ventures Pvt. Ltd. and not by the assessee company. Therefore, according to the Ld. representative, under Section 170 of the Act, the addition, if any, has to be made only in the hands of M/s PVP Ventures Pvt. Ltd. and not in the hands of the present assessee. T....
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.... that year shall be made on the successor in like manner and to the same extent as it would have been made on the predecessor, and all the provisions of this Act shall, so far as may be, apply accordingly. (3) When any sum payable under this section in respect of the income of such business or profession for the previous year in which the succession took place up to the date of succession or for the previous year preceding that year, assessed on the predecessor, cannot be recovered from him, the Assessing Officer shall record a finding to that effect and the sum payable by the predecessor shall thereafter be payable by and recoverable from the successor, and the successor shall be entitled to recover from the predecessor any sum so paid. (4) Where any business or profession carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall be assessed and recovered in the manner provided in section 171....
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.... amalgamated company, namely, the successor company. In this case also, M/s PVP no assessment can be made in the hands of M/s PVP Ventures Pvt. Ltd. In fact, order passed by the Director of Income Tax (International Taxation) was quashed by the Hyderabad Bench on the ground that M/s PVP Ventures Pvt. Ltd. is not in existence. Therefore, in view of Section 170(2) of the Act, the income of M/s PVP Ventures Pvt. Ltd. has to be assessed only in the hands of the present assessee upto the date of amalgamation and also subsequent to the date of amalgamation. In other words, there cannot be any assessment order in favour of the company which is not in existence on and after 01.10.2007. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) is not correct in holding that the assessment, if any, has to be made in the hands of M/s PVP Ventures Pvt. Ltd. and in the hands of the present assessee. The observation made by the CIT(Appeals) that the assessment, if any, has to be made in the hands of M/s PVP Ventures Pvt. Ltd. amounts to making an assessment in the case of non-existing company. Therefore, in view of non-obstante clause in Section 170(2) of the Act, this Tribunal....