TaxTMI 
TaxTMI 
2017 (12) TMI 1322
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....was framed by Income Tax Officer 4(2)(1), Mumbai on 22/03/2013. 2.1 Facts leading to same are that the assessee being resident corporate assessee engaged in manufacturing and trading of fabrics was assessed for impugned AY u/s 143(3) at Rs. 5,35,97,480/- after certain additions / adjustments / disallowances as against returned income of Rs. 3,95,45,621/- e-filed by the assessee on 30/09/2010. The additions which are the subject matter of this appeal are as follows:- 2.2 During assessment proceedings, it was noted that the assessee paid a rent of Rs. 3,68,560/- to an entity namely ALD Automotive Private Limited but did not deduct any TDS thereupon on the strength of 'No Deduction certificate' issued by ACIT-TDS1(1) dated 11/06/2009. The Ld....
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....h led to depreciation disallowance to the extent of Rs. 42.45 Lacs. 3. Aggrieved, the assessee contested the same without any success before Ld.CIT(A) vide impugned order dated 14/01/2015 where the additions against incentives were confirmed on the premises that the expenses did not crystallized during impugned AY and the same, being contingent in nature, were not allowable u/s 37(1). The stand of Ld. AO was confirmed qua other additions also. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Counsel for Assessee [AR] contested the addition against rent on the premises that the assessee did not deduct TDS against rental payment on the strength of 'no deduction certificate' issued u/s 197 in payee's favor by the concerned ....
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....the simple reason that the impugned amount of Rs. 68,890/- was well below the threshold limit of Rs. 1,20,000/- as prescribed u/s 194-I during impugned AY so as to trigger the stated TDS provisions. Moreover, the annexure to certificate u/s 197 issued by concerned TDS officer quantifies the 'Estimated Total Billing for F.Y.2009-10' u/s 194-I' which lead us to conclude that the same was applicable for the whole financial year. Resultantly, this addition stands deleted and this ground of assessee's appeal succeeds. 7. The main dispute regarding addition against incentive expenses is crystallization. It is beyond doubt that under mercantile system of accounting, expenses pertaining to impugned AY were allowable to the assessee in impugned AY ....
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....u/s 391 to 394 of the Companies Act, 1956, as approved by High Court of Bombay, one undertaking of an entity namely Stripes Apparels Ltd. (Transferor Company) was amalgamated into the assessee company which became effective from 29/06/2009. The entire business and whole of undertaking of the transferor company, on going concern basis, stood transferred to Assessee Company with effect from 01/04/2008. Pursuant to exchange ratio as approved under the scheme, the assessee allotted shares valuing at Rs. 173.98 Lacs i.e. 17,39,866/- equity shares of Rs. 10/- each to the shareholders of the transferor company as against net assets of Rs. 598.51 Lacs taken over by the assessee company. The differential of the two i.e. Rs. 424.52 Lacs gave rise to ....
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....ten down value of which is governed by Explanation 2A and 2B to Section 43(6). Since, the assessee is resulting company, Explanation 2B is applicable and the same is reproduced below:- Explanation 2B.-Where in a previous year, any asset forming part of a block of assets is transferred by a demerged company to the resulting company, then, notwithstanding anything contained in clause (1), the written down value of the block of assets in the case of the resulting company shall be the written down value of the transferred assets of the demerged company immediately before the demerger. Therefore, while deleting the impugned additions, we deem it proper to restore the matter back to the file of Ld. AO for limited purpose of verifying the fact....