TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 751
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....gs 1.1 That on the facts and circumstances of the case and in law, despite the department put to notice of the factum of the amalgamation during assessment proceedings, the assessment notices and the consequent assessment order dated 27 December 2018, being issued under section 142(1) [scheme became effective after notice issued under section 143(2)] and made under section 143(3) by the Deputy Commissioner of Income tax, Circle 14(2)(1) (learned AO) in the name of non-existent/ amalgamating company are bad in law. 1.2 That on the facts and circumstances of the case and in law, the proceedings are bad in law as the assessment is framed in the name of the amalgamating company, which was not in existence. 1.3 That the appellant in response to the appeal hearing Notice dated 26 June 2023 has filed additional submissions on 11 July 2023 vide reply dated 10 July 2023. However, the learned CIT(A) in Para 3, page 10 of the order has stated in the remarks column that no reply was filed. Accordingly, the learned CIT(A) without considering the said reply has decided the appeal against the appellant. Thus, the appeal order should be set aside as being passed in violation of principles of....
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....Private Limited w.e.f. 01/10/2016 and yet the AO framed the assessment order dated 27/12/2018 in the name of Zyma Laboratories Limited, a non-est company. It has been further pointed out that subsequent assessment order was also passed bearing the same order number and the same date in the name of Lupin Investments Private Limited as successor to Zyma Laboratories Limited. It is the say of the ld. Counsel for the assessee that the AO could not have passed the second assessment order unless the first order was withdrawn. 4. We have given a thoughtful consideration to the submissions of the ld. Counsel. Insofar as, the first order which is in the name of a nonest company is concerned, we find that the order is unsigned and, therefore, it is non-est in the eyes of law. The second order which is in the name of Lupin Investments Private Limited, is successor to Zyma Laboratories Limited, is a valid order physically signed by the AO. Therefore, we do not find any force in the contentions raised vide Ground No. 1 and the same is dismissed. 5. Coming to the grievance raised vide Ground No. 2, briefly stated the facts of the case are that while scrutinising the return of income, the AO no....
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....ded the issue in favour of the assessee and against the revenue. It would suffice if we refer to one of the decisions of the Co-ordinate Bench Mumbai in the case of Vora Financial Services (P.) Ltd. Vs. ACIT (supra). The relevant findings read as under:- "23. The last issue urged by the assessee relates to the addition of Rs. 82.89 lakhs made u/s 56(2)(viia) of the Act. The facts in brief are that the assessee, during the year under consideration, made an offer to existing shareholders for buy back of 25% of its existing share capital at a price of Rs. 26/- per share. The offer was open between 8th May, 2013 and 22nd May, 2013. One of the directors Shri Kashyap Vora offered 12,19,075 shares under the buyback scheme and accordingly the assessee bought those shares paid a consideration of Rs. 316.95 lakhs on 24.05.2013. The AO noticed that the book value of shares as on 31.3.2013 was Rs. 32.80 per share, whereas the assessee company has bought back the shares at Rs. 26/- per share. 24. The AO proposed to invoke the provisions of sec.56(2)(viia) of the Act to this transaction of buy back. The said provisions read as under:- "56(2)(viia) where a firm or a company not being a comp....
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.... reliance on the Memorandum Explaining the provisions in Finance Bill, 1999 available in (1999) 236 ITR (St.) 155. 26. He submitted that the provisions of sec.56(2)(vii) were introduced as counter evasion mechanism as explained in the Memorandum Explaining the provisions in the Finance Bill, 2010 (2010)(321 ITR (St.) 110)", which is extracted below:- "B. The provisions of section 56(2)(vii) were introduced as a counter evasion mechanism to prevent laundering of unaccounted income under the garb of gifts, particularly after abolition of the Gift Tax Act. The provisions were intended to extend the tax net to such transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade, the profits of which are taxable under specific head of income. It is, therefore, proposed to amend the definition of property so as to provide that section 56(2)(vii) will have application to the "property" which is in the nature of a capital asset of the recipient and therefore would not apply to stock-in-trade, raw material and consumable stores of any business of such recipient." The Ld A.R submitted that the above said explanations squarely apply....
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....tly assessed the difference u/s. 56(2)(viia) of the Act. 30. We have heard rival contentions on this issue and perused the record. The provisions of sec. 56(2)(viia) reads that "where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested" The words "firm or a company" "any property, being shares of a company" are important here. In this regard, we may refer to the Memorandum explaining the insertion of Provisions of sec. 56(2)(viia) by the Finance Act, 2010, which reads as under:- "Under the existing provisions of section 56(2)(vii), any sum of money or any property in kind which is received without consideration or for inadequate consideration (in excess of the prescribed limit of Rs. 50,000) by an individual or an HUF is chargeable to income-tax in the hands of recipient under the head 'income from other sources'. However, receipts from relatives or on the occasion of marriage or under a will are outside the scope of this provis....