2022 (9) TMI 1645

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...., wherein, the partners of the firm are the shareholders of the assessee company. Further, the Assessing Officer has failed to examine the transaction of sale of 107894 equity shares of assessee having Face Value of Rs.10/- at a premium of Rs.4,990/- to Exova (U.K) Ltd. 2.1. The ld. Authorised Representative of the assessee (in short 'ld. AR') raised multiple contentions assailing validity of invoking jurisdiction u/s. 263 of the Act, as well as, on the merits of issues raised in revision order. The ld. AR pointed that a perusal of the impugned order would show that the proceedings have been initiated on 'reference'. To substantiate his contentions, the ld. AR referred to para 2 and 3 of the impugned order wherein the PCIT has used the expression 'on reference' and 'considering the reference'. The ld. AR submitted that the provisions of Section 263 of the Act cannot be invoked on a reference made by any other authority. In support of his contentions, the ld. AR placed reliance on the order of Pune Bench in the case of Alfa Laval Lund AB vs CIT in ITA No. 1287/Pun/2017 dated 02.11.2021. 2.2. On merits of the issues, the ld. AR assailing the observation of the PCIT that the ass....

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....ransactions or both but the taxpayer has either not filed the Accountant's report under Section 92E at all or has not disclosed the said transactions in the Accountant's report filed;" The ld. AR contended that in the light of facts mentioned above the case of the assessee does not fall within the parameters of the condition set out by the Board in the instructions (supra). 2.6. The ld. AR submitted that the PCIT vide notice dated 21.05.2020 had sought further information from the assessee and the same was provided to the PCIT. Hence, in the light of information furnished, no further reference was required to be made to the AO/TPO. 2.7. The ld. AR pointed that the PCIT in the impugned order has objected to assessee's claim of depreciation. As per PCIT, the Assessing Officer in assessment proceedings has not examined the issue, hence it falls under Explanation-2(a) and (b) to Section 263 of the Act. The ld. AR referred to notice under Section 142(1) of the Act dated 22.08.2016 (page 267 of the Paper Book). The ld. AR pointed that the Assessing Officer made a specific query with regard to the depreciation at Sr. No. 15 of the annexure to the notice under Section 142(1) of th....

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.... Shri Shishir Mehtra and Ms. Shifali Mehta are the Promoter Directors. - Exova (UK) Ltd. subscribed to 107894 shares of the assessee company for a total consideration of Rs.53.94 crores. The equity share having face value of Rs.10/- was sold at a premium of Rs.4990/-. - The promoter directors Shri Shishir Mehtra and Ms. Shifali Mehta jointly sold 20,000 equity shares held in assessee company to Exova (UK) Ltd. - Out of total consideration of Rs.78.25 crores paid to M/s. Metallurgical Services, Rs.70 crores was on account of goodwill on which depreciation has been claimed by the assessee. 7. The first argument raised by the assessee assailing the action of PCIT for invoking revisional jurisdiction u/s. 263 of the Act is that the provisions of section 263 of the Act have been invoked on a 'reference'. The PCIT has not examined the issue on its own, hence, exercise of powers u/s. 263 of the Act, on reference from another authority is not valid. A bare perusal of the provisions of section 263 of the Act would show that for assuming revisional jurisdiction the PCIT/CIT may call for and examine records of any proceedings under the Act and if he considers ....

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....e statute it shall be deemed to be omitted from its inception unless it is protected by Saving clause or a provision to make it clear that action taken or proceedings initiated under that provision or section would continue and would not be left on account of omission. The Hon'ble High Court approving the findings of Tribunal held: "6. In fact, Coordinate Bench under similar circumstances had examined the effect of omission of sub-section (9) to Section 10E of the Act w.e.f. 01.04.2004 by Finance Act, 2003 and held that there was no saving clause or provision introduced by way of amendment by omitting sub-section (9) of Section 10B. In the matter of GENERAL FINANCE CO. vs. ACIT, which judgment has also been taken note of by the tribunal while repelling the contention raised by revenue with regard to retrospectively of Section 92BA(i) of the Act. Thus, when clause (d) of Section 92BA having been omitted by the Finance Act, 2017, with effect from 01.07.2017 from the Statute the resultant effect is that it had never been passed and to be considered as a law never been existed. Hence, decision taken by the Assessing Officer under the effect of Section 92BI and reference ma....

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....een the said entities, thereafter would fall within the realm of Chapter -X of the Act. We find merit in ground No.3 of the appeal. The assessee succeeds on the same. 10. The next submission of the assessee is with regard to claim of depreciation on goodwill acquired under slump sale agreement. The arguments of the assessee before the PCIT in respect of depreciation on goodwill is that the goodwill represents all business and commercial information and rights pertaining to the business acquired from the partnership firm. The assets acquired from the M/s. Metallurgical Services inter-alia includes all industrial, commercial, and other licenses, accreditations, technical registration and certification, all intellectual property rights including trademarks, logo, knowhow, copy rights, software design rights, rights in data base, etc. The intangibles also include existing contracts of purchases, maintenance, vendor contract, etc., transfer of technical expertise employees as well. The assessee in order to substantiate his contentions placed reliance on the following decisions: (i) CIT vs Smifs Securities Ltd., 348 ITR 302 (SC); (ii) DCIT vs Toyo Engineering India L....