TaxTMI 
TaxTMI 
2025 (5) TMI 351
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....'Ld AO') in pursuance to the directions of the Dispute Resolution Panel ("Ld. DRP") are bad in law and void ab initio being passed in the name of a non-existent entity which ceased to exist with effect from May 14, 2018 in pursuance to the Scheme of Amalgamation and accordingly vitiates the whole assessment proceedings. In relation to Transfer Pricing adjustment 2. On the facts and in the circumstances of the case & in law, the Ld. AO/TPO grossly erred in making a Transfer Pricing adjustment of INR 6,29,40,000 in pursuance to the directions of Ld. DRP to the return of income. 3. On the facts and in the circumstances of the case & in law, the Ld. AO/TPO erred in not accepting the economic analysis undertaken by the Appellant in accordance with the Indian TP regulations of adoption of transaction by transaction by approach and erred in facts and law by applying the aggregation approach for the determination of Arm's Length Price ('ALP') of all international transaction undertaken by the Appellant in the year under consideration to hold that the such international transactions are not at arm's length. 3.1 On the facts and in ....
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....pellant by applying persistent loss filter. Taxability of Income from Other Source 6. On the facts and in the circumstances of the case & in law, the Ld. AO erred in including the income from other source amounting of Rs. 5,02,10,547 in the computation sheet in-spite of the fact that such amount is correctly set-off with the current year business loss in the assessment order leading to incorrect carry forward of losses for the year under consideration. 7. On the facts and in the circumstances of the case & in law, the Ld. AO/TPO erred in levying interest under section 234D of the Act and incorrectly computed the interest allowable under section 244A of the Act to appellant in computation sheet. 8. On the facts and in the circumstances of the case & law, the Ld. AO/TPO erred in lying penalty under section 270A of the Act mechanically without considering the fact that the appellant has neither under reported nor misreported its income during the year under consideration. The above grounds of appeal are independent, of and without prejudice to each other. The appellant craves leave to add, amend, rescind, modify, or withdraw any ground(s) h....
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....st complex entity while the Appellant is characterized as an entrepreneur with regard to above mentioned transactions. 3.4 On the facts and in the circumstances of the case & in law, the Ld. AO/TPO erred in not appreciating that on the basis of application of Comparable Uncontrolled Price ('CUP') method, the international transactions of payment of interest have been adequately demonstrated to be at arm's length. 3.5 On the facts and in the circumstances of the case & in law, the Ld. AO/TPO erred in not appreciating that on the basis of application of the Other Method, the international transactions of payment of reimbursement of expenses and recovery of expenses cost to cost basis has been adequately demonstrated to be at arm's length and are similar to cost allocation which Ld. DRP directed to exclude from cost base. 3.6 On the facts and in the circumstances of the case & in law, the Ld. AO/TPO erred in not excluding the provision of services (Secondment Services) being the receipt of the Appellant from the cost base considered for making an transfer pricing adjustment in the hands of the appellant without appreciating that such amount b....
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....d. AO/TPO erred in initiation of penalty under section 270A of the Act mechanically without considering the fact that the Appellant has neither under reported nor misreported its income during the year under consideration. The above grounds of appeal are independent of, and without prejudice to each other. The Appellant craves leave to add, alter, amend, rescind, modify, or withdraw any ground(s) herein above or produce further documents either before or at the time of hearing of this appeal." 2. We take ITA No. 1670/Del/2022 as a lead case for Assessment Year 2017-18 to adjudicate both these appeals. 2.1. Facts of the case may be summarized as that the assessee has electronically filed its return of income for Assessment Year 2017- 18 on 29.11.2017 and revised return of income on 29.03.2018 by declaring total income at INR NIL/- (Losses of current year to be carried forward INR 9,92,05,22,878/-). The case was selected for scrutiny assessment through CASS. Accordingly, notice u/s 143(2) was issued and served upon the assessee. The reasons for selection of the case are as under: "Value of foreign remittance sent by the assessee is higher than the gross tot....
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....y of Telenor South Asia Investment Pvt Limited, with effect from May 14,2018, TCPL been merged with Bharti Airtel Limited. The assessee company for the year under consideration, provided telecom services in 6 telecom circle namely, Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Pradesh (East) and Uttar Pradesh (West). 7. It is further submitted that the assessee / appellant company amalgamated with Bharti Airtel Limited with appointed date of May 14, 2018 and the amalgamation was effective pursuant to order of the National Company Law Tribunal (NCLT), dated 08.2018, which is placed at page 1-82 of the Paper Book and pursuant to the said merger, Telenor stood dissolved from the appointed date. 8. It is also submitted that the assessee / appellant company filed a letter dated 12.06.2018 with Ld. AO giving intimation of the amalgamation of company with request to update the relevant records of the appellant. In the said letter, the assessee/appellant company intimated the Deputy Commissioner of Income Tax, Circle 25(1), New Delhi, that the assessee company i.e. Telenor (India) Communication Private Limited, has been merged with the Bharti Airtel Limited, pursuant to the sche....
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....mpany came to be dissolved by operation of law. The Ld. AR relied upon the judgment of Hon'ble Delhi High Court in the case of P. R. Commissioner of Income- tax -7 Vs. Vedanta Ltd. ITA No. 88/2022 in which Hon'ble High Court held that there was a valid disclosure made by the respondent/assessee and the Ld. AO being duly apprised of the factum of merger and despite the same, the learned AO framed the draft assessment order in the name of a party which no longer existed on that date. The relevant para is reproduced as under: "15. In the facts of the present case, however, we find that there was a valid disclosure made by the respondent-assessee and the AO being duly apprised of the factum of merger. Despite the above, it chose to make the draft assessment order in the name of a party which no longer existed on that date. This was, therefore, not a case where the factum of merger had either been suppressed or where the respondent had held out that Cairn still existed and could be proceeded against. It was the conduct of the assessee in Sky Light which had convinced the Supreme Court to observe that the mistake would not render the order of assessment invalid and that it could....
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....ion in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment (supra). 34. We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-12 must, in our view be adopted in respect of the present appeal which relates to AY 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable." 14. From the bare perusal of the material placed on record and submissions advanced on behalf of the assessee, it is crystal clear that soon after amalgamation, the assessee / appellant company intimated the Ld. AO vide letter dated 12.06.2018, reg....