TMI Blog2012 (11) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been effected on 31.03.2008 and consequently the claim of the assessee for set off had to be allowed. The objections of the revenue as projected in the grounds of appeal in this regard therefore are devoid of any merit. The fact that TAPL filed the return of income for A.Y. 2008-09 is also of no consequence - Order of the ld. CIT(A) does not call for any interference - appeal by the revenue is dismissed. - ITA No.1193/Bang/2011 - - - Dated:- 31-7-2012 - SHRI N. BARATHVAJA SANKAR AND SHRI N.V. VASUDEVAN, JJ. Appellant by : Shri Sarangan, Sr. Counsel Respondent by : Shri Farahat Hussain Qureshi, CIT-II (DR) ORDER Per N.V. Vasudevan, Judicial Member This appeal by the revenue is against the order dated 19.09.2011 of the CIT(Appeals)-I, Bangalore relating to assessment year 2008-09. 2. Grounds No.1, 5 6 are general in nature and requires no adjudication. The other grounds of appeal raised by the revenue reads as under:- 2. The learned CIT(Appeals) was not justified in allowing the assessee to set off of loss of amalgamating company (M/s. Tulip Apparels) with the profits of the appellant amalgamated company, without appreciating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vest with the assessee. TAPL will stand dissolved without winding up. Between the appointed day till the date on which the scheme finally takes effect i.e., the effective date, the business which is carried on by TAPL shall be deemed to have been carried on for and on behalf of assessee and in trust for the assessee. Since the scheme of amalgamation required the sanction of the Hon ble High court of Karnataka, TAPL as well as the assessee filed petition for sanction of the scheme of amalgamation in Company Petition No.97/2009 Company Petition No.80/2009. By an order dated 06.02.2010, the Hon ble High Court of Karnataka sanctioned the scheme of amalgamation as proposed by TAPL and the assessee. 5. The assessee filed the return of income for the A.Y. 2008-09 declaring business income of Rs.31,36,33,145. Consequent to the sanction of scheme of amalgamation by the Hon ble High Court, the assessee filed letter before the Assessing Officer wherein the assessee claimed set off of carried forward losses of TAPL against the income declared by the assessee. This claim was made in view of the provisions of section 72A of the Act, which provides that where there is amalgamation, then the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is concluded that the setting off of the losses is a colourable device and treated as such. To avoid the payment of taxes on the whopping profit of Rs.31,36,33,145, the assessee had resorted on the scheme of amalgamation and made a wrong claim of set off from the losses of another related party Therefore the set off of the losses is hereby disallowed and the same amount is added back to the income of the assessee. 8. The assessee preferred an appeal before the CIT(Appeals) and submitted that consequent to the sanction of the scheme of amalgamation, the loss of TAPL had to be adjusted against the income of the assessee company, both under normal computation of income as well computation u/s. 115JB of the Act. The assessee also pointed out that by virtue of the provisions of section 72A of the Act, the assessee was entitled to the claim of set off. The assessee also highlighted that it was not possible for the AO to question the scheme of amalgamation, which has been duly sanctioned by the Hon ble High Court. The steps taken by the assessee for the amalgamation were also highlighted. The assessee also pointed out that even though the court s sanction in a scheme of amalgamation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (supra) had to deal with a question as to the authority of the ITO calling upon the transferee company to file return of income for the period after the amalgamation has taken effect. The Hon ble Supreme Court has observed as follows:- .. that since the company courts had not only sanctioned the scheme of amalgamation as presented to them, but had also not specified any other date as the date of transfer/amalgamation, it followed that the date of amalgamation/date of transfer was the date specified in the scheme as the transfer date. In such a situation, it would not be reasonable to say that the scheme of amalgamation took effect on and from the date of the order sanctioning the scheme. The business carried on by the subsidiary company should be deemed to have been carried on for and on behalf of the appellant-company. This was the necessary and the logical consequence of the court sanctioning the scheme of amalgamation as presented to it. The order of the court sanctioning the scheme, the filing of the certified copies of the orders of the court before the Registrar of Companies, the allotment of shares, etc., might have all taken place subsequent to the date of amalgamati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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