TMI Blog2017 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... he comparables / upward adjustment made by the AO / TPO and directed the AO to reject some comparables so that Arm s Length Margin comes within range of 5%. ii. Ld. CIT(A) had erred in allowing deduction amounting to ₹ 2,28,87,852/- u/s 10A of the Act. iii. The appellant craves for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing or appeal. 2. The grounds raised by the assessee in its cross objections are following: 1. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the orders of the Assessing Officer (AO) / Transfer Pricing Officer (TPO) which were arbitrary, bad in law and / or void ab initio. 1.1. That on the facts and circumstances of the case and in law, the AO / TPO have grossly erred in passing the order under section(s) 143(3) / 92CA of the Act, on non-existent (amalgamated) entity, namely, Heartland Delhi Transcription Services Private Limited. Further, CIT(A) erred in upholding such order(s). 2. That that CIT(A) erred on facts and in law in upholding the action of the AO, in invoking the provisions of Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions declared by the assessee at ₹ 15,38,37,583/-. Accordingly the addition of ₹ 1,54,79,764/- was made and assessment was framed at an income of ₹ 3,85,65,380/- by making transfer pricing adjustment and disallowance of deduction u/s 10A of the Act amounting to ₹ 2,28,87,852/-. 5. Being aggrieved the assessee carried the matter before the learned CIT(A) who sustained the addition made by the AO on account of Transfer Pricing Adjustment amounting to 1,54,79,764/- and deleted the disallowance of deduction u/s 10A of the Act amounting to ₹ 2,28,87,852/-. 6. Now the Department is in appeal against the relief allowed and the assessee has filed the cross objection challenging the validity of the assessment order passed by the AO on the non-existent (amalgamated entity) namely M/s Heartland Information and Consultancy Services Pvt. Ltd. The learned counsel for the assessee submitted that the assessee company was amalgamated with M/s Heartland Information and Consultancy Services Pvt. Ltd., Bangalore (HICS) and in this regard letter dated 19th October, 2008 was filed with the AO informing him that pursuant to the order dated 25.07.2008 of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings, therefore, in view of the provisions contained in Section 292 B of the Act, the assessee has no right to challenge the validity of the assessment at this stage. 8. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the assessee M/s Heartland Delhi Transcription and Services Pvt. Ltd. (HDTS) amalgamated with M/s Heartland Information and Consultancy Pvt. Ltd. (HICS) in pursuant to the order of the Hon ble Delhi High Court dated 25th July, 2008 and this fact was brought to the notice of the AO (Income Tax Officer, Ward-12 (3), Director of Income Tax, TP-1, New Delhi, Additional Commissioner of Income Tax-12 New Delhi and Commissioner of Income Tax - 4, New Delhi vide separate letters each dated 19th October, 2008 copies of which are placed at page 900 to 907 of the assessee s paper book and order of the Hon ble Delhi High Court dated 25th July, 2008 for the aforesaid amalgamation is placed at page no. 908 to 918 of the assessee s paper book. It is also noticed that the AO referred the matter u/s 92 CA of the Act of the amalgamated company M/s (HDTS) to the TPO who passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the sing Officer, the assesseecompany was still in existence. Clearly, this was a case where the assesssment was contrary to law, as having being completed against a non-existent company. The Tribunal's decision is, in the circumstances, justified and warranted. 12. Similarly, the Hon'ble Jurisdictional High Court in the case of Spice Infotainment Ltd. v. CIT [IT Nos. 475 476 of 2011, dated 3-8-2011] held as under: No doubt, M/s Spice was an assessee and as an incorporated company and was in existence when it the returns in respect of two assessment years in question. However, before the case could be ted for scrutiny and assessment proceedings could be initiated, M/s Spice got amalgamated with M Corp Pvt. Ltd. It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was dully sanctioned vide orders dated 11th February, 2004. With this amalgamation made effective from 1st July, 2003, M/s Spice ceased to exist. That is the plain and le effect in law. The scheme of amalgamation itself provided for this consequence, inasmuch as simultaneous with the sanctioning of the scheme, M/s Spice was also stood dissolved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the contention of the Id. CIT DR was that the assessment was rightly framed by the AO on the assessee who filed the return of income and when the income was earned, it was inexistence. This controversy has been settled by the Hon'ble Jurisdictional High Court in the case of CIT v. Dimension Apparels (P.) Ltd. [2015] 370 ITR 288/[2014] 52 taxmann.com 356 (Delhi) wherein it has been held as under: Section 170(2) of the Income-tax Act, 1961, makes it clear that in the case of amalgamation, the assessment must be made on the successor (i.e., the amalgamated company). Section 176 which contains provisions pertaining to a discontinuation of business, does not apply to a case of amalgamation. The language of section 159 evidently only applies to natural persons and cannot be extended through a legal fiction, to the dissolution of companies. Once it is found that assessment is framed in the name of non-existing entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of section 292B. Participation by the amalgamated company in assessment proceedings would not cure the defect because there can be no estoppels against law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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