TaxTMI 
TaxTMI 
2021 (1) TMI 878
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....ncome Tax Act 1961, (hereafter referred 'the Act') vide order dated 09.12.2016. 2. The only issue in this appeal of assessee is as regards to disallowance of the claim of losses by restricting the losses at 84.5% on account of assets being retained by assessee i.e. proportionate allowance of losses by invoking the provisions of section 72A(4)(b) of the Act. Thereby the loss disallowed at Rs. 28,02,356/-. For this, the assessee has raised grounds which are as under: 1. That the Assessing Officer (AO) as well as CIT(A) erred in law as well as on the facts of the case in invoking the provisions of section 72A(A)(b) of the Act and thereby concluding that since 84.54% of the assets were retained by the appellant, being assets pertain....
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.... relevant AY there was a demerger of Sinner Unit of Exemplar Engineering Pvt. Ltd. (EEPL) w.e.f 01.04.2013 as approved by Hon'ble Bombay High Court vide order dated 01.08.2014. According to this demerger, all the assets & liabilities of the Sinner Unit of EEPL was transferred to the assessee. The assessee claimed entire loss of Rs. 1,81,26,485/- as the said loss pertains to the demerger unit and accordingly assessee claimed that its case was covered under the provision of section 72A(4)(a) of the Act. The Assessing Officer while framing assessment under section 143(3) of the Act made disallowance of set off of losses and restricted the claim of loss at Rs. 1,53,24,129/- as against claimed by assessee in the return of income at Rs. 1,81,26,4....
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....to AY 2014-15. Hence, the appellant's contentions are without any basis and relevant supporting evidences. In such case, since the EEPL has retained 15.46% of total assets, and only 84.54% of total assets have been transferred to appellant company consequent upon said scheme of demerger/ amalgamation, the AO has correctly restricted the brought forward losses/unabsorbed depreciation of Sinnar Unit to 84.54% of total losses of EEPL, by invoking the provision of section 72A(4)(b) of the Act. 3.3 In view of above, the denial of set-off of losses to the extent of Rs. 28,02,356/- made by AO is hereby confirmed, and therefore, the grounds of appeal are dismissed. 6. Aggrieved against the action of Assessing Officer, assessee came ....
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....he resulting company, as the case may be." 8. It was claimed by assessee that the income of investment division of EEPL is taxed under the head "Income from Other Sources" and does not form part of income from Business or Profession. Accordingly, the unabsorbed business and depreciation loss pertains wholly and exclusively to the demerger unit and no part of the said expense is attributable to the investment division. It is not the case of the assessee which falls under the provisions of section 72A(4)(b) of the Act as EEPL was not maintaining separate books of account of its two units namely Investment Division and Sinner Unit, which is already the demerged unit, hence, it is not possible to said that the entire losses pertains to the s....
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....ts of EEPL were submitted. Hence, he requested that on principle issue can be decided here but matter can be restored back to the AO for verification of facts. 11. We have heard rival contentions and gone through the facts and circumstances of the case. The above facts discussed are very clear. It is a fact that this is a very small issue concerning disallowance of carry forward of loss of Rs. 28,00,000/-. We have noted that the Investment Division of EEPL has made profit in AY 2009-10 till AY 2012-13 as is seen from computation of income filed in the assessee's Paper Book. Hence, the question of reducing the losses of the Sinner Unit to the extent of losses pertaining to the Investment Division does not arise. We noted that the entire l....