TaxTMI 
TaxTMI 
2025 (5) TMI 1546
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....lay in filing of appeal and admit appeal filed by the assessee for adjudication. 3. The assessee has raised the following grounds of appeal: (1) The learned CIT(A)-3, Chennai, grossly erred in holding that the AO could have only reinstated the original assessment order, in the facts and circumstances of the case and in law. (2) The learned CIT(A) has grossly erred in not considering that the AO did not carry out the computation of income, as specifically directed by the Hon'ble ITAT, in its order in ITA No.584/Mds/2017, dated 26.02.2018, rendering his order unsustainable. (3) The learned CIT(A) ought to have quashed the order of the AO, reinstating he income, as per the original order, as being not in conformity with the findings recorded by the Hon'ble ITAT, in its order, in ITA No.584/Mds/2017, dated 26.02.2018, in the facts and circumstances of the case and in law. (4) The learned CIT(A), ought to have held that the order of the AO, giving effect to the order of the Hon'ble ITAT, in ITA No.584/Mds/2017, dated 26.02.2018, was also clearly barred by limitation of time, in the facts and circumstances of the case and in law. ....
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.... of its share holding in the assessee company by the holding company immediately after the transfer. 4) Check whether Rs. 1,28,02,155 loan waiver of Bank of Ceylon has already been included as income by the assessee in previous year. Also check how much is the interest component in this. This interest has to be an allowable business expense. 5. Details relating to the above issues were called for from the assessee vide letter dated 20.07.2018, there was no response from the assessee till the date of passing of this order. Therefore, it is amply clear that the assessee has no substantiating evidence for its claimed. 6. Hence the additions made vide order u/s 143(3) r.w.s. 147 dated 30.12.2010 is sustained and the total income is computed as under: Income assessed as per Assessment Order dt. 30.12.2010 9,81,88,359 Income assessed as per this order 9,81,88,359 7. Credit to prepaid taxes and self assessment tax are given as available in ITD. Interest under section 234A, 234B and 234C are charged as per law. Demand notice u/s 156 is enclosed. 7. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) - 3....
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....s the transfer on 05.12.1996/03.02.1997 was to a wholly owned subsidiary, in the hands of KICL the transferor, the capital gains on the sale value of assets at Rs. 9.70 Crores as reduced by their cost of acquisition, was exempt under section 47(iv) and consequently, immediately after transfer the cost of acquisition of assets in the hands of the Subsidiary KOIL will be the cost of acquisition in the hands of the Holding Company by section 49(1)(iii)(e) of the Act. • Subsequent to transfer of the undertaking, KICL transferred its shareholding in KOIL to the promoters of the assessee Company on 06.05.1997. With the transfer of these shares KOIL ceased to be 100% subsidiary of KICL. KOIL changed its name to PLR Industries (PLI) with effect from 12.05.1997 (Page 28 of the paper books). • Once KOIL/PLI ceased to be subsidiary of KICL within 7 years of transfer of undertaking, the capital gains on the original transfer ceases to be exempt in view of provisions of section 47A and the capital gains originally exempt requires to be charged in the hands of KICL for AY 1997-98.Consequently, as per section 49(3) of the Act, the cost of acquisition of the assets in the....
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....ransfer of the undertaking on 15.12.1996/03.02.1997. • The CIT(A), in the first round of litigation, in the first round has held that "holding company has transferred all the shareholding in its subsidiary on 12.05.1997 and ceased to be a holding company of KOIL (Page 67 of PB - 1). • The ITAT, in the first round of litigation, at Para 7.2 has held that finding upon verification about the transfer be necessarily required for verification, ignoring that both the AO and the ld.CIT(A) has categorically confirmed transfer of shares by KICL. However, in the next sentence, the ITAT has gone ahead accepting assessee's contention and has not directed any verification. • Therefore, the transfer of shares of KOIL/PLI by KICL on 06.05.1997 has been accepted by the AO, the CIT(A) and the ITAT in the first round in ITA No.584/Mds/2017 dt.26.02.2018 and requires no further verification. Hence the cost of acquisition of the land in the hands of the assessee can never be the cost of acquisition of the land in the hands of KICL but it will be cost of acquisition of the land in the hands of KOIL/PLI as per the Transfer deed and valued by the Stamp Authoriti....
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....rmined by the Stamp authorities/ reflected in the Books of KOIL/PLI with suitable indexation. 11. The ld.AR in respect of other issue of additions u/s. 41(1), the loan was taken from 'Bank of Ceylon' which was waived as held by the Apex Court in the case of Mahindra and Mahindra (404 ITR 1) waiver of a loan is not taxable as income and the same cannot be taxed u/s. 41(1). As regards applicability of section 41(1) to interest, the department has not proved whether this amount has been allowed as deduction earlier particularly as in case of interest outstanding amount would not have been allowed earlier in view of the disallowance under the provisions of section 43B regarding non- payment. Hence disallowance u/s. 41(1) should be deleted. 12. Per contra the ld. DR relied on the orders of lower authorities. 13. We have heard the rival contentions perused the material available on record and gone through the orders along with paper books submitted. 14. The first issue to be decided is in respect of considering the cost of acquisition against sale of immovable property by the assessee during the A.Y.2005-16. The undisputed fact is that the assessee is the owner of the land an....
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.... Building Rs. 1,50,05,052/-) and the same has been recorded in the books of accounts of the PLR industries limited(KOIL). On amalgamation, the values of assets & liabilities recorded in the books of the transferor company have been incorporated by the transferee company(assessee) in the books of accounts duly audited as on 31.03.1998. 16. The present dispute is whether the revenue is right in passing the order i.e. the AO and the ld.CIT(A) who have adopted the value of Rs. 23,872/- as the cost of acquisition of the impugned asset which has been recorded by the Company KICL (before the transfer of business of textile unit) for the purpose of computing the long term capital gain on the sale of immovable property in the hands of assessee for a consideration of Rs. 10.00 Crores. The company KICL had not discharged the taxes on the amounts realized / accepted on account of sale of textile business unit to its subsidiary for Rs. 9.70 Crores, during the financial year 1996-97 (i.e. 05.12.1996), after obtaining approval from the appropriate authority of Income Tax department (24.01.1997), since the slump sale was between the holding and subsidiary company, which was exempt from capital ....