TaxTMI 
TaxTMI 
2020 (11) TMI 229
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.... assessing officer can not go beyond the directions of the Commissioner of Income tax, even though during the course of fresh assessment proceedings, it is open to the assessing officer to examine any items other than specific item examine to have the proper income assessed as prospective?" 2. We have heard Mr.T.R.Senthilkumar, learned Senior Standing counsel and Mrs.K.G.Usharani, learned counsel for the appellant / Revenue and Mr.R.Vijayaraghavan, learned counsel for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for the respondent/assessee. 3. We need not labour much to decide the Substantial Question of Law raised by the appellant / Revenue in this appeal on account of the fact that the order, which is impugned before us passed by the Tribunal is as a result an order passed by the Commissioner of Income Tax dated 09.06.2008 under Section 263 of the Act. 4. This order was on the subject matter of consideration in the assessee's own case for the earlier Assessment Year, which travelled up to the Hon'ble Division Bench of this Court in the case of The Commissioner of Income Tax-II Vs. Lakshmi Machine Works Limited in T.C.A.No.747 of 2009 dated 13.02.2019 and the appea....
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....ion 72A of the Act relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in cases of amalgamation or demerger were also noted by the BIFR in its sanction order. The relevant portions of the order are extracted below: '6.0 MERGER/REHABILITATION PROPOSAL The present rehabilitation scheme has been prepared based on the proposal submitted by the company involving merger of TCL with LMW. LMW has made cash accruals of Rs. 5337 lacs on a total income of Rs. 53458 lacs during 2002-03. The secured creditors of TCL are fully settled by LMW and liabilities of unsecured creditors are being absorbed by LMW. No reliefs/concessions are sought from secured/unsecured creditors. As per the scheme of amalgamation, one equity share of Rs. 100/- each in LMW is proposed to be allotted to the shareholders of TCL for every 200 shares of Rs. 10/- each held. The proposal also involves vesting of the 2 spinning units that are presently with TCL with LMW or with its wholly owned subsidiary or subsidiaries in existence or to be formed, at the option of LMW. The merger Scheme (copy placed at Appendix I) would be operative from April 1, 2003 (the appointed date)....
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....k a cue from the rationale of Circulars Nos.523 dated 05.10.1988 and 576 dated 31.08.1990 by virtue of which the impact of the provisions of Sections 41(1) and 139(3) of the Act relating to cessation of liability and return of loss that enabled an assessee to claim carry forward of losses under section 80 of the Act, was minimised in cases where the BIFR had sanctioned a scheme of rehabilitation. The Circulars provided that in such circumstances, the Scheme sanctioned by the BIFR would override the statutory provisions as aforesaid. 10. According to the Tribunal the very fact that the BIFR has sanctioned the scheme was sufficient and no further compliance need be called for in regard to the conditions set out under section 72A of the Act as the provisions of the SICA would override those of the Income tax Act. The order under section 263, to the extent to which it revised the order of assessment was quashed, and the conclusion of the Assessing Officer in order dated 22.08.2006 allowing the claim of the assessee for carry forward of loss was confirmed. It is as against the aforesaid order that the revenue is in appeal before us. 11. We have heard learned counsel and the de....
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....ation that was intended to be remedied by its introduction as also the true concept of financial Don- viability. From the budget speech of the Finance Minister, the Notes on Clauses of the Finance Bill (No. 2) of 1977 and the Memorandum explaining to provisions of the said Bill it will appear clear that sickness among industrial undertaking was regarded as a matter of grave national concern inasmuch as closure of any sizable manufacturing unit in any industry entailed social costs in terms of loss of production and unemployment as also waste of valuable capital assets, and experience had shown that taking over of such sick units by Government was not always a satisfactory or economical solution; it was felt that a more effective method would be to facilitate amalgamation of sick industrial units with sound ones by providing incentives and removing impediments in the way of such amalgamation which would not merely relieve the Government of uneconomical burden of taking over and running sick units but save the Government from social costs in terms of loss of production and unemployment. With such objective in view, in order to facilitate the merger of sick industrial units with sound....
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....lace, entertained applications for revival, sanctioning appropriate schemes for rehabilitation. Thus, a sanction by the BIFR implies that the requirements of Section 72(2) of the Act have been met. 17. This provision, and the interplay thereof with the provisions of the Income tax Act has been considered by the Supreme Court in the case of Indian Shaving Products (supra) where at paragraph 7 the Bench holds as follows: '7. Under Section 72 of the Income Tax Act, to give to the amalgamated Company the benefit of the loss or, as the case may be, allowance for depreciation of the amalgamating company for the previous year in which the amalgamation was effected for the purposes of the Income Tax Act, the Central Government must, upon the recommendation of the specified authority, be satisfied that the amalgamating company was not, immediately before the amalgamation, financially viable by reason of its liabilities, losses and other relevant factors, and that the amalgamation was in the public interest, By reason of Section 32(2) of the said Act, where there has been under any scheme thereunder an amalgamation of a sick industrial company with another company, the provisions of ....