TMI Blog2009 (4) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst software and Silicon systems India Pvt.Ltd. which ceased to exist w.e.f. 1.4.2004; (iii) the alleged reasons considered by the Ld.CIT(A) in upholding the action of the AO are not tenable in law and/or on facts; (iv) the impugned order u/s 143(3) of the Act is void ab initio without any authority of the law/jurisdiction and liable to be quashed; (v) without prejudice to the grounds taken above, the Ld.CIT(A) erred in upholding the action of the ACIT in adding back the sum of ₹ 5,311 on account of alleged negative cash balance; and (vi) the Ld. CIT(A) erred in upholding the charge of interest u/s 234B and 234D of the Act 3. The Revenue in its grounds of has raised six grounds. On a perusal, we find that ground Nos:1, 5 and 6 are general which, in our considered view, do not survive for adjudication. The remaining three effective grounds are as under: (i) the ld.CIT(A) erred in treating the expenditure on purchase of application software as revenue in nature without appreciating the facts stated in the assessment order; (ii) the Ld.CIT(A) erred in deleting the disallowance of 10% of the total operating and other expenses without appreciating the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not disputed by it The appellant had voluntarily furnished its return, in its former name of SSIPL, in respect of which scrutiny proceedings were initiated on 16/2/2004-which was also prior to the AD. The appellant had participated in the scrutiny proceedings without raising any objection. Thus, on the facts of the case, the appellant was assessable to income-tax to determine its tax liability, if any, for the accounting period prior to the AD of amalgamation. Therefore, the AO, who had the jurisdiction to assess the appellant, in its former name of SSIPL, had rightly assumed jurisdiction to assess it Accordingly, the impugned order is valid in law. In such view of the matter, the objection raised by the appellant, challenging the jurisdiction, is found untenable. Besides, the provisions of the section 292-B of the Act are also supportive to the proceedings initiated.......................... 7. Another effective ground was directed against the assessing of ₹ 5,311 on the ground that the same representing the negative cash balance. The AO from the verification of the cash book/petty cash book had found deficit cash balance of ₹ 5,311 as on 31.12.02. After discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e holding company, 10% of such expenses are treated as incidental to the business. The ld.CIT(A), in his order held that ad hoc disallowance is not sustainable as the AO instead of verifying the genuineness, unreasonableness, excessiveness of the said expenses, has acted arbitrarily and disallowed 10% without any basis or reason. 9.3. In deleting the addition on account of disallowance of international relocation expenses, the Ld.CIT had reasoned that this disallowance was made with a cryptic observation that the same was incurred on employees of the ITIPL. In view of the AO had failed to substantiate his action in disallowing the said expenses even in his remand report, the CIT(A) went on to delete the disputed disallowance. 10. Aggrieved by the action of the Ld. CIT(A), both parties, the Revenue as well as the assessee have come up with their respective appeals before us. 11. Let us first address to the grievance of the assessee. The Ld. AR of the assessee had submitted that the impugned order of the assessment was bad in law and void ab initio. He had extensively quoted section 2(31) and section 2(7) of the Act to drive home his point. Strong reliance was placed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 and as such the amalgamating company stands dissolved without winding up and its name got struck off with the Registrar of Companies. SSSIPL was not in existence when the assessment proceedings were completed. The assessment was to be made on ITIPL being a successor in interest whose jurisdiction was lying with another AO and not the AO who passed the order without jurisdiction which was null and void and is liable to be quashed . 11.2. During the course of hearing, the Ld. AR had furnished a paper book containing ninety two pages which consists of, inter alia, copy of scheme of amalgamation with copy of Hon'ble High Court's order, copy of letter dt. 29.6.2004, copy of Tribunal's order etc. Subsequently, another paper book containing 28 pages was submitted which consists of written submission, copy of ITAT decision, correspondence with the CIT(A) etc. On the other hand, the Ld. D.R. was of the firm view that the Ld.CIT(A) had decided the issue in a judicious way so far as the jurisdiction of the AO was concerned which does not require any interference at this stage. However, he disputed the action of the Ld.CIT(A), (i) in treating the expenditure on purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act are also supportive to the proceedings initiated and concluded in the interest of the revenue. 12.2. Reverting back to the issue, the I.T.A.T., Delhi in the case referred supra, has observed, thus- 12. In view of the legal position as laid down in the aforesaid decision, it is clear that the assessment made in the present case in the name of HP India after the date of its dissolution is not valid. The fact that this company filed a return of income is not of any consequence. The order of the assessment was made on 25.2.2005. As on this date HP India as an entity did not exist. The assessment is therefore held to be invalid and is cancelled. 12.3. With regard to the applicability of S.292B, the ITAT, Kolkata Bench in its decision in the case of ITO v. Tollygunge Club Ltd. reported in 52 ITD 166 has held that an order passed under section 154 without a valid notice suffered from lack of jurisdiction which could not be cured by taking recourse to section 292B. 12.4. In over all consideration of the facts and circumstances of the issue as discussed supra and respectfully following the decisions referred supra, we are of the considered view that the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
