TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 1484
X X X X Extracts X X X X
X X X X Extracts X X X X
.... respect of investment in purchase of property at B-41, Chander Nagar, Ghaziabad without appreciating the fact that the real investment exceeds the investment shown in the assessee's books of accounts. 2. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs. 6,05,71,018/- made on account of apportionment of suppressed sales/receipts as worked out on the basis of seized material and the statement of the Director of the company recorded u/s 132(4) of the Income Tax Act, 1961 and as worked by the Special Auditors. 3. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs. 4,64,576/- made u/s 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962. 4. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts; (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." Grounds of Cross Objection 1. "The ld. CIT(A) is erred under the law while holding that Assessing Officer has a valid jurisdiction u/s 153A of the Act; 2.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x Act. The Department is in appeal before us against the certain additions being deleted by the ld. CIT(A). The cross objection however, raises a very fundamental aspect about assumption of jurisdiction by the ld. Assessing Officer. At this juncture, we consider it appropriate to take up the cross objection first. 2.2. The ld. AR submitted that the Assessing Officer has erred in law in framing an illegal order, which is also barred by limitation. He submitted that no corresponding seized material was found in the course of the search for the additions made during the assessment proceedings. He also submitted that the returns for the year under consideration were filed prior to the date of search in the normal course suo moto, disclosing all the particulars relatable to the subject additions. The returns of income were processed u/s 143(1) of the Act. He further submitted that having accepted the returns filed by the assessee u/s 143(1), and no assessment proceeding was pending as on the date of initiation of search, and hence as no notice u/s 143(2) was issued within the prescribed time under the Act no assessment proceeding for any of the asstt. years abated. He submitted that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." Grounds of CO No. 296/D/2012 1. "The ld. CIT(A) is erred under the law while holding that Assessing Officer has a valid jurisdiction u/s 153A of the Act; 2. The ld. CIT(A) is erred under the law while holding that the special auditor appointed u/s 142(2A) of the Act has implied authority to seek extension of time for completing the audit and consequential furnishing of report; 3. That the ld. CIT(A) is erred under the law while holding that the order framed by the Assessing Officer u/s 153A is not barred by limitation inspite of the Special Auditor report not being received on time; 4. That having regard to the facts and circumstances of the case ld. CIT(A) has rightly deleted the addition of Rs. 55,235/- made on account of disallowance of business expenditure as the appellant has started its business activity during the year. The expenses incurred are fully allowable u/s 37 of the Act; 5. That having regard to the facts and circumstances of the case ld. CIT(A) has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the leave to add, amend, modify, delete any of the grounds of cross objection before or at the time of hearing. Grounds of ITA No. 3656/D/2012 1. "That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the additions of Rs. 30,17,722/- and Rs. 15,14,087/- made u/s 50C/69C of the Income Tax Act, 1961 on account of unaccounted investment made in purchase of properties at E-5 & E-6, Chander Nagar, Ghaziabad respectively; 2. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 6,41,96,022/- made on account of apportionment of suppressed sales/receipts as worked out on the basis of seized material and the statement of the Director of the company recorded u/s 132(4) of the Income Tax Act, 1961 and as worked by the Special Auditors; 3. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts; (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." Grounds of CO No. 298/D/2012 1. "The ld. CIT(A) is erred under the law while holding that Assessing Officer has a valid jurisdiction u/s 153A of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of Mahagun group. The ld.AR submits that the assessment proceeding in the present case was initiated by issuing a notice u/s.153A on 02.03.2009 in the name of Mahagun Developers Pvt. Ltd. The ld. AR submitted that the assessment has been completed on a non-existing person as M/s Mahagun Developers P. Ltd., the assessee was amalgamated with Mahagun India Pvt. Ltd. vide order dt. 01.06.2006, passed by the Hon'ble Delhi High Court. The ld. AR submitted that the erstwhile assessee, being M/s Mahagun Developers Pvt. Ltd., did not have a legal existence at the point of time when the notice was served and the survey u/s 133A of the Act was conducted on the assessee's premises. The ld. AR submitted that this fact was brought to the notice of the search team by the Director of the company while recording his statement u/s 133 of the Act. 8. On the contrary the ld. DR submitted that because the liabilities of the amalgamating company accrue to the amalgamated company the issuance of notice as well as completion of assessment on the assessee is justified. The ld. DR submitted that it was merely a technical irregularity which got cured the moment assessee participated in the assessment pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of amalgamation, the predecessor (being a dissolved company), "cannot be found". Consequently, section 170(2) applies. This provision clarifies that where the predecessor cannot be found: "the assessment of the income of the previous year in which the succession took place up to the date of the succession and of the previous year preceding that year shall be made on the successor in like manner and to the same extent as it would have been made on the predecessor." (emphasis supplied) 9.3 The ld. DR has argued that the assessment is justified because the liabilities of the amalgamating company accrue to the amalgamated (transferee) company. While that is true, the question here is, which entity the assessment must be made on. The text of section 170(2) makes it clear that the assessment must be made on the successor (i.e., the amalgamated company). 9.4 The Hon'ble Supreme Court, in Saraswati Industrial Syndicate Ltd. vs. CIT [1990] 186 ITR 278 held that: ".......after the amalgamation of the two companies the transferor company ceased to have any identity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jo....