TaxTMI 
TaxTMI 
2017 (8) TMI 538
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.... and not otherwise ? 4)Whether in the facts and circumstances of the present case and in law the Tribunal was justified in holding that the provisions of Section 72A will apply in the case of the assessee or Section 32(2) read with Section 43(6) of the Income-Tax Act, 1961 ? 5)Whether in the facts and circumstances of the present case and in law the Tribunal was justified in holding that the decision rendered by the Bombay High Court in the case reported in 187 ITR 1 holds good even after the insertion of clause (c) and substitution of explanation (2) below section 43(6) by the Taxation Law (Amendment Act, 1986 ? 2. This reference relates to Assessment Year 1989-90. 3. Mr.Bhattad, learned Counsel for the applicant/Revenue, in support of the Reference, at the very outset, states that he has been instructed not to press Question Nos. 3 and 4 hereinabove. Consequently, the above questions are being returned unanswered as 'not pressed'. 4. The facts set out in the Statement of case are as under: "(a) The CIT vide order dated 21.3.1994 under Section 263 of the Income-Tax Act had set aside the Assessment Order dt.30.3.1992 for being done de novo in accordance with law. T....
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....because the CIT did not agree with the conclusion of the A.O. in this case, regarding the application of Section 72A, the order of the A.O. cannot be held to be erroneous. The ITAT have further observed that the insertion of sub-clause (c) which operates w.e.f. 1.4.1998, below Section 43(6) of the Act, does not have any bearing whatsoever on the law laid down by the Bombay High Court in the case reported in 187 ITR 1. (d). Vide para 7 of its order, the Tribunal held that Section 72A is applicable only in the case of amalgamation of sick Companies with sound one. In the instant case, the Tribunal held that both the Companies were sound and, therefore, the case of the assessee is not governed by the provisions of Section 32A but shall be governed by the provisions of Section 32(2) read with Section 43(6) of the Income-Tax Act. The Tribunal further held that for claiming the benefit of Section 72A, the amalgamating Company was required to fulfill not only the condition of sickness but certain order conditions as well. The Tribunal further held that the scope of Section 72A was limited to this kind of small section of a particular kind of amalgamation. After going through the amendme....
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....tion of the merged company is or can be carried forward under section 32(2). The Tribunal held that ordinarily the unabsorbed depreciated of a merged company is not carried forward under section 32(2) and Explanation 3 is not attracted. The Tribunal further held that if the approval/sanction is eventually received from the specified authority under Section 72A and the unabsorbed depreciation of the merged company is allowed to be carried forward, Explanation 3 will be affected. The Tribunal held that the cost of acquisition of the capital assets taken over by the assessee from the merged company reduced by depreciation actually allowed only if approval under Section 72A is not received. The Tribunal further held that there is a lot of difference in the situation when the whole of the unabsorbed depreciation of the merged company is allowed as the current year's depreciation of the amalgamated company and the situation when the cost of the capital asset is not reduced by unabsorbed depreciation of the merged company so that the assessee gets enhanced depreciation over the years. The Tribunal got support from the decision of the Hon'ble Supreme Court in the case of Indian S....
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....Tribunal by it's order dated 29th March, 1996 allowed the respondent/assessee's appeal by holding that the view taken by the Assessing Officer was a possible view based upon the decision of this Court in the case of Hindustan Petroleum Corporation Ltd. (supra). Therefore, placing reliance upon the decision of this Court in the case of Commissioner of Income-Tax .vs. Gabriel India Ltd. 203 ITR 108, the impugned order holds that the powers of Revision under Section 263 of the Act cannot be exercised merely because the Assessing Officer has a different view on the facts. We find that the same has been reiterated by the Apex Court in the case of CIT .vs. Max India, 295 ITR 282. 6. Mr.Bhattad, learned Counsel for the Revenue/appellant contended that the exercise of powers u/s.263 of the Act by the Commissioner of Income Tax was warranted as the decision of this Court in Hindustan Petroleum Corporation Ltd. (supra) being rendered in the context of earlier statutory provision can have no application to subject Assessment Year. Further Mr.Bhattad sought to urge that the issue at hand was not examined by the Assessing Officer while granting benefit on the basis of Hindustan Petrol....