TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 896
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.... forward business loss and unabsorbed depreciation of the said demerged undertaking in Times Global Broadcasting Company Limited as on 31st March 2013 stood at Rs. 2,12,01,39,009/- and Rs. 50,90,85,147/-, respectively, which was available under the provisions of Section 72A(4) of the Income Tax Act, 1961 (the Act). Petitioner filed return of income for A.Y. 2015-16 declaring total income of Rs. 1347,05,13,250/-, which was subsequently revised at Rs. 1355,59,25,070/-. After the case was selected for scrutiny under CASS, the assessment was completed under Section 143(3) on 30th December 2018 assessing the total income at Rs. 1440,22,10,761/under normal provisions of the Act. 3. Petitioner received a notice dated 31st March 2021 issued under Section 148 of the Act in which the Jurisdictional Assessing Officer one Mr.Neeraj Kumar Agarwal has alleged that he had reasons to believe that petitioner's income chargeable to tax for A.Y. 2015-16 has escaped assessment within the meaning of Section 147 of the Act. We have for a particular reason mentioned the name of the concerned officer because that is very relevant for deciding this petition. The same Mr. Neeraj Kumar Agarwal had submitted....
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....t levy of tax of Rs. 90,43,05,396/- and Interest of Rs. 40,69,37,438/-. (b) CIT's comments. : i) If the facts stated by audit are not correct, full & correct fact must be stated : Not Acceptable. ii) Reasons for acceptance or non-acceptance must be invariable given. : 1. During FY 2014-15 (A.Y. 2015-16), Times Now the English News Channel (a division of Times Global broadcasting Company Limited, hereafter called as "TGBCL"), was transferred to BCCL by way of demerger with effect from the appointed date 1st April 2014 as approved by the Honorable Bombay high Court vide its order dated January 16, 2015. As per the Scheme, the assets and liabilities of the demerged undertaking ("Times Now" English Channel) have been transferred to and vested in the Assessee Company with effect from 1st April, 2014. The Financial Statements for the year ended 31st March 2015 are prepared from the books of account giving effect to the said Scheme. Accordingly, the return of income has been prepared giving effect to the above scheme. Copy of demerger scheme and High Court order is attached for your reference. 2. Section 72A of the Act contains provisions re....
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....ly before the demerger; Following proviso shall be inserted in sub-clause (iii) of clause (19AA) of section 2 by the Act No. 23 of 2019, w.e.f. 1-4-2020: Provided that the provisions of this subclause shall not apply where the resulting company records the value of the property and the liabilities of the undertaking or undertakings at a value different from the value appearing in the books of account of the demerged company, immediately before the demerger, in compliance to the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015; (iv) the resulting company issues, inconsideration of the demerger, its shares to the shareholders of the demerged company on a proportionate basis except where the resulting company itself is a shareholder of the demerged company; (v) the shareholders holding not less than three-fourths in value of the shares in the demerged company (other than shares already held therein immediately before the demerger, or by a nominee for, the resulting company or, its subsidiary) become shareholders of the resulting company or companies by virtue of the demerger, Otherwise than as a result of the acqui....
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....D) in charge of PCIT-1, Mumbai" 4. Therefore, the said Mr. Neeraj Kumar Agarwal has, on or about 19th February 2021, opined that petitioner has claimed and has been correctly allowed the set-off of business loss and unabsorbed depreciation pertaining to Times Now business, which was demerged from Times Global Broadcasting Company Limited into petitioner as per the provisions of Section 72A(4) and not as per the provisions of Section 72A(1) as mentioned in the audit observation sheet. He has not accepted the audit objection. Strangely, in less than 45 days, the same person Mr.Neeraj Kumar Agarwal, relying on the same audit objection, states that he has reasons to believe that petitioner's income chargeable to tax has escaped assessment. Even in the reasons recorded for issuing notice under Section 148, extract of which has been provided to the petitioner vide a communication dated 20th September 2021, he has basically reproduced the gist of audit objection which is reproduced above. Paragraph 3 of the reasons reads as under:- "3. It was seen form the record that the set off of Rs. 266,05,04,254/- allowed included brought forward business loss of Rs. 212,01,39,009/- and un....
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....d depreciation pertaining to Times Now business, which was demerged from Times Global Broadcasting Company Limited into petitioner as per the provisions of Section 72A(4) and not as per the provisions of Section 72A(1) as mentioned in the audit observations sheet. The same Assessing Officer has not accepted the objections. From this it is quite clear that the Assessing Officer had to issue notice on the ground of direction issued by the audit party and not on his personal satisfaction which is not permissible under law. A similar issue was considered by the Apex Court in M/s. Larson & Toubro Limited Vs. State of Jharkhand (2017) 13 SCC 780. A Division Bench of this Court in Commissioner of Income Tax (LTU) Vs. Reliance Industries Limited [2016] 382 ITR 574 (Bom) has also taken a similar view. A Division bench of this Court in IL and FS Investment Managers Limited Vs. Income Tax Officer [2008] 298 ITR 32 (Bom) has held, "11. We have considered the submissions of both the counsel. In the facts of the present case, it is quite clear that the petitioner was granted depreciation allowance on the intangible assets in the nature of know-how purchased by it. A regular assessment order wa....