TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 791
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....and readymade garments. The assessee had filed its original return of income for the Asst Year 2013-14 on 28.11.2013 which was later revised on 30.3.2015 declaring total income of Rs. 283,15,81,630/- under normal provisions of the Act and Rs. 411,70,32,063/- u/s 115JB of the Act. The reasons for revising the return was duly explained by the assessee company vide its letter dated 15.11.2016 which has already been considered by the ld AO while framing the assessment. The ld AO completed the assessment u/s 143(3) of the Act on 9.2.2017 determining total income at Rs. 366,01,24,600/- under normal provisions of the Act and Rs. 440,88,34,676/- u/s 115JB of the Act. In the said computation of income in the assessment order, the ld AO had specifically mentioned that a sum of Rs. 267,17,80,899/- for the Asst Year 2013-14 would be eligible to be carried forward for set off in subsequent years in bold letters. The assessee challenged the assessment by preferring an appeal before the learned Commissioner of Income Tax (Appeals) [ ld CITA] on the aggrieved issues. 4. We find that with effect from 1.7.2017, M/s Aditya Birla Nuvo Ltd (ABNL) amalgamated with Grasim Industries Ltd as per the schem....
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....Acquisition Cost of Acquisition (Short Term) Sale consideration Profit as per Books Long Term Profit / (Loss) as per Income Tax 1 Aditya Birla Minacs Worldwide Limited ABNL IT & ITES Limited (Note-1) Various 14.03.2013 2,56,62,266 4,43,63,44,411 Various 852 (7,10,71,26,351) 4,43,63,44,411 (2,67,07,81,942) 2 Aditya Birla Housing Finance Limited Aditya Birla Finance Limited (Note-2) 30.10.2009 30.11.2012 3,89,500 39,04,738 632 852 (52,63,982) 42,65,025 ....
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....er:- "Details of long term capital loss on sale of shares of Aditya Birla Minacs Worldwide Limited 4.1. The Assessee company was holding investment (99.60%) in the shares of Aditya Birla Minacs Worldwide Limited ("Minacs India‟), which was engaged into the business of Information Technology & Enabled Services (ITeS). 4.2. The IT & ITes business of Minacs India was not performing as expected and therefore, due to commercial expediency, the Assessee Company wanted to exit from the ITeS business and it was in talks with the various investors. 4.3. In order to achieve the object of exiting from IT & ITes business by divestment of shares of Minacs India, the Assessee Company incorporated another subsidiary company ABNL IT & ITES Ltd. ("ABNL IT & ITES‟) (Special Purpose Vehicle (SPV) on 21st February 2013 with the capital of Rs. 5,00,000 held by the Assessee Company (95%) and ABNL Investment Ltd (5%), ABNL Investments Ltd is another 100% subsidiary of the Assessee Company. 4.4. On 14th March 2013, 2,56,62,266 shares of Minacs India were sold to ABNL IT & ITES Limited at cost of Rs. 172.87 (Cost of Rs. 443,63,44,411 divided by 2,56,62,266 shares) which was substantia....
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.... F.Y.2011-12 Years of Purchase Nos. of Shares Cost as per books Cost Inflation Index in the year of purchase Indexed Cost (F.Y.) 12-13=852 2001-02 5,311,669 1,002,853,083 426 2,005,706,166 2004-05 3,440 126,282 480 224,151 2008-09 463,240 33,024,192 582 48,344,693 2009-10 482,686 28,438,503 632 38,337,982 2010-11 200,367 12,002,161 711 14,382,336 6,461,402 1,076,444,221 A 2,106,995,328 Aditya Birla Minacs Worldwide Ltd., (Transworks Information Services Ltd) Year of purchase Nos of Shares Cost Cost Inflation Index in the year of purchase Indexed Cost (F.Y.12- 13=852) 2003-04 15,738,378 687,787,270 463 1,265,647,417 2006-07 5,000,000 1,500,000,000 519 2,462,427,746 2011-12 4,437,974,852 1,170,973,274 785 1,270,916,216 2012-13* - 1,139,646 852 1,139,646 3,359,900,190 B 5,000,131,024 TOTAL A + B 7,107,126,353 Sale Consideration 4,436,344,411.00 Le....
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....ion as under: "As per section 47(iv) of the Act, any transfer of capital asset by a company to its Indian subsidiary company is not regarded as transfer if the parent company or its nominees hold the whole of the share capital of the subsidiary company. In the instant case, the assessment was completed under section 143(3) r.w.s. 144C of the Act determining taxable income at Rs. 3,66,01,24,600. It was seen that the assessee claimed and was allowed Long Term Capital loss of Rs. 2,67,17,80,899 to be carried forward to future years. This LTCL of Rs. 2,67,17,80,899 included LTCL of Rs. 2,67,07,81,942/- on sale of 25662266 shares of Aditya Birla Minacs Worldwide Limited to ABNL IT & ITES Ltd., It was seen that the transferee ABNL IT & ITES Ltd., was a 100 percent subsidiary of the assessee. As the said transaction is not to be treated as transfer under section 47, the allowance of Long Term Capital Loss was not in order. By generating LTCL in violation of the Act, the assessee would be able to reduce future LTCG tax liability by this action. Non-disallowance of irregular claim of LTCL on account of transfer of assets to its subsidiaries resulted in excess carry forward of LTCL b....
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....Act, the assessee would be able to reduce future LTCG tax liability by this action. Non disallowance of the irregular claim of LTCL on account of transfer of assets to its subsidiaries resulted in excess carry forward of LTCL by Rs. 2,67,07,81,942 with a consequent short levy of tax of Rs. 57,76,90,134/- (potential). The Department did not accept the audit observation stating that ABNL IT & ITES Ltd., is not a wholly owned subsidiary of the Assessee Company. The Assessee in the course of assessment proceeding was asked for and assessee filed details vide letter dated 21st October 2016 which I have already gone through and only after proper perusal allowed such claim. On the date of such transaction, ABNL held 95% shares of ABNL IT & ITES Limited and 5% was held by ABNL Investment Ltd., Accordingly, the observation in the Audit note is factually incorrect. The reply of the Department was found not acceptable. The Assessing Officer, by accepting that the assessee had claimed that ABNL held 95% shares of ABNL IT & ITES Limited and 5% was held by ABNL Investment Ltd should have simultaneously started penalty proceeding under section 271(1)(c) of the Act against the assessee for mis....
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....othing but borrowed satisfaction. Hence the said revision proceedings u/s 263 of the Act need to be construed as bad in law. Reliance in this regard has been rightly placed by the ld AR on the decision of Hon'ble Jurisdictional High Court in the case of CIT vs Maharashtra Hybrid Seeds Co. Ltd reported in 102 taxmann.com 48 (Bom). The relevant operative portion of the said judgement is reproduced hereunder:- "9. As rightly held by the Tribunal, this note firstly shows that all the explanations and arguments of the Assessee have been considered by the Assessing Officer and secondly that the action taken under Section 263 is only on the basis of the audit party's note or report, who it would appear, ultimately did not approve of the Assessing Officer's view regarding the allowability of the deduction. Admittedly, the CIT has not referred to any audit objection but in the light of the note, the Tribunal held that it would be a fair inference that his action under Section 263 was consequent upon the audit objection. Be that as it may, this office note clearly shows that the Assessing Officer had taken all explanations and arguments of the Assessee into consideration before all....