9911796707
TMI Blog2012 (10) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the business of steel castings. During the assessment year 2007-08, the assessee company amalgamated with M/s. Flow Link Systems Pvt. Ltd., Coimbatore. For the assessment year 2007-08, the assessee company had filed return of income on 27.10.2007 admitting total income of Rs.72,47,890/- and profit under section 115JB as Rs. 8,90,689/- . The case of the assessee was selected for scrutiny. Notice under section 143(2) was issued to the assessee on 9.9.2009. The Assessing Officer vide assessment order dated 30.12.2009 accepted the income returned by the assessee. The CIT(A) served show cause notice dated 13.6.2011 to the assessee under the provisions of section 263 on the following grounds:- "1.That the assessee, had amalgamated with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of rates prescribed on the assets owned by the amalgamating and amalgamated companies in a previous year; and accordingly is allowed after apportionment on the basis of number of days such asset was used by them. Therefore, the depreciation, calculated at prescribed rates, on the assets added to the amalgamated company after its amalgamation would not be possible for apportionment to the amalgamating company for, such asset, as borne by the facts, obviously could not have been used by the company as it was not existing. And, no asset can be added to the amalgamating company other it got amalgamated as, it would not be in existence. Thus, depreciation on assets, added after the amalgamation is allowable only in the hands of the amalgamated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation allowed to the amalgamating and amalgamated companies not exceeding the deduction calculated at the prescribed rates, and apportioned between the companies proportionate to the number of days before and after the date of amalgamation was correct and therefore dropped the proceedings u/s.263 which did not arise in law, and in the facts and the circumstances of the case." 4. Shri K.Raghu, Authorized Representative appearing on behalf of the assessee submitted that the assessee company amalgamated with M/s. Flow Link Systems (P) Ltd. with effect from 1.9.2006. All the assets and liabilities of the amalgamating company were taken over by amalgamated company . He placed on record a copy of depreciation statement for the period end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the words of proviso "as if amalgamation had not taken place" with effect from 1.9.2006. 5. On the other hand, Mr. Vikramaditya, appearing on behalf of the Revenue strongly supported the order passed by the CIT. 6. We have heard the submissions made by the respective parties and have gone through the documents on record. A perusal of the depreciation statement for the period ended 31.3.2007 shows that the assessee had claimed depreciation on pro-rata basis for the period of five months. The balance depreciation has been claimed by the amalgamated company i.e. M/s. Flow Link Systems Pvt. Ltd. as per the proviso to section 32 of the Act. As per the statement made at Bar by the AR, both the companies had earned profits for respective yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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