TaxTMI 
TaxTMI 
2017 (10) TMI 582
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....sioner of Income-tax (Appeals) - III, Bangalore [hereinafter referred to as "the learned CIT (A)"] erred in enhancing the income of the appellant by R.S. 29,95,570, by treating the excess of sales consideration received over Written Down Value (WDV) of the block of plant and machinery, as short term capital gains without appreciating that: (a) The India Branch of Makino Asia Pte Ltd was amalgamated with the appellant with effect from April 1, 2002. (b) Pursuant to such amalgamation, the plant and machinery purchased by Makino Branch (amalgamating company) during the year is to be considered as assets purchased by the appellant and: .that the same would not result in extinguishment of the block and Therefore, the short t....
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....ssing Officer in the assessment order passed under Section 143(3) disallowed the claim of depreciation of Rs. 3,92,55,854 on the ground that the statement of depreciation along with the supporting invoices has not been furnished. Aggrieved by the action of the Assessing Officer the assessee filed appeal before the CIT (Appeals). In the meantime the claim of depreciation was allowed by the Assessing Officer in the petition under Section 154 of the Act when the assessee produced requisite details and documents however, the CIT (Appeals) issued a show cause for enhancing the assessment by an amount of Rs. 29,95,570 being STCG under Section 50(1) which was originally offered in case of Makino Asia Pte Ltd, The CIT (Appeals) was of the view that....
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....ever, post merger/amalgamation, the assessee filed a revised return and did not offer the said STCG to tax whereas all the income of the amalgamated company become the income of the amalgamating company and therefore the said STCG is taxable in the hand of the assessee. He has further submitted that this fact of transfer of block of assets by Makino Asia Pte Limited was not disclosed in the scheme of amalgamation and also it does not find place in the order of Hon'ble High Court approving the amalgamation. He has relied upon the impugned order. 6. We have considered the rival submissions as well as the relevant material on record. There is no dispute that Makino Asia Pte Limited and Makino Machine Tools India Pvt. Ltd. got merged w.e....
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....e Limited sold its entire block of assets of plant and machinery during the year relevant to the assessment year under consideration however, the said transfer would be treated as a transfer post amalgamation in view of the approval of the scheme of amalgamation w.e.f. 1.4.2002. Therefore consequent to the amalgamation this transaction of transfer of the assets would be treated as transfer by the entity came into existence post amalgamation. There is no dispute that even after the transfer of the said assets the assessee was still having balance in the block of assets of plant and machinery. Therefore the conditions as stipulated under Section 50 of the Act have not been satisfied so that any capital gain arising in the hand of the assessee....