TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 632
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....the addition of Rs. 10.82 Cr made on account of revaluation of cost of land without properly appreciating the facts of the case." 2. Fact in brief is that return of income declaring total income at Rs. 22,78,08,140/- was filed on 12.02.2021. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 29.06.2021. A survey u/s 133A of the Act was carried at assessee's business premises on 22.09.2021. During the course of survey action, it was seen that assessee had purchases hundred percent shares of Somani and Co. Pvt. Ltd. for consideration of Rs. 182 crores vide share purchase agreement dated 04.01.2012. Subsequently, amalgamation of Somani and Co. Pvt. Ltd. into assessee company has been approved by the Ho....
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....paid only for share purchase consideration and credited full ownership and interest in the said land which had higher fair market value then the share purchase consideration. Therefore, the AO concluded that under the amalgamation the assessee had deliberately adopted fair value to record assets in order to artificially increase the WIP with the intention of undermining its profit. Therefore, the AO observed that assessee had not offered tax on related amount of re-valuation reflected in the form of capital reserve. Accordingly, the AO has added an amount of Rs. 10.82 crore as impact of revaluation in cost as worked out at para 19 of the assessment order. 3. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the ap....
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....est of public. The appellant further submitted that once the High Court has approved the scheme of amalgamation and no objection was raised by the Income Tax Authorities against the proposed scheme, then post the approval of the scheme, no statutory authority has any power to question the validity of the said order. Appellant also relied upon following judicial pronouncements: ITO vs. Purbanchal Power Co. Limited (ITA No. 201/KOL/2010 dated 17.07.2014) (Kolkata ITAT) Electrocast Sales India Limited -vs- DCIT (2018) 170 ITD 507 (KO. ITAT); Keva Fragrance Pvt. Limited -vs. - DCIT (ITA No. 334/M/2020 dated 02.08.2021) (Mum. ITAT); CIT-vs.- M/s Long View Tea Co. Ltd. (ITAT No. 169 of 2015 order dated 22.06.2018) (Calcutta HC). 10....
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....rities. 10.7 Given the underlying facts, I am also not convinced with the arguments of the AO on considering the cost of acquisition of shares as cost of land. The appellant, during the course of hearing, placed on record the assessment order for AY 2012-13 wherein the event of amalgamation and the effect of recording the capital asset at fair market value consequent to its conversion to stock-in-trade was placed before the AO. The effect of recording the capital asset at fair market value at the time of conversion of the same from investment to stock in trade was given in the AY 2012-13. The said assessment year was assessed by the then AOs twice. Once vide assessment order dated 31.03.2015 passed u/s 143(3) of the Income Tax Act, 1961 ....
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.... to take a different view of the matter-and, if there was no change, it was in support of the assessee we do not think the question should have been reopened and contrary to what had been decided by the CIT/in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under ss. 11 and 12 of the IT Act of 1961. 10.9 Moreover, it is seen that the Fair Market Value (FMV) of the said land was taken at Rs. 1054.90 crore at the time the said land was converted from capita....
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....ed per cent shares of Somani & Co. Pvt. Ltd. for consideration of Rs. 182 crores vide share purchase agreement dated 04.01.2012. Thereafter, the said company was amalgamated with the assessee company as per the scheme of amalgamation vide Hon'ble Bombay High Court order dated 17.08.2021 with effect from 01.01.2012. In accordance with the scheme of amalgamation, the assessee had recorded all the assets of the transferor company at fair value and the excess of assets over liability was treated as capital reserve in the books of the assessee company. Accordingly, the assessee company had shown capital reserve of Rs. 872 crores and corresponding to this reserve it valued inventory work in progress at Rs. 1054 crores and had written off investme....