TMI Blog2017 (7) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of law and facts are involved, hence they are decided by this common judgment. 2. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the tribunal has dismissed the appeals of the department. 4. The counsel for the appellant has framed the following substantial questions of law in each appeal:- Income Tax Appeal No.191/2017 (i) Whether in the facts and in circumstances of the case, the ITAT was justified in law and has not acted perversely in allowing set off current year and brought forward losses and unabsorbed depreciation of M/s. Terry Towel Ltd. against the income of the assessee company despite of the fact that the issue of merger has not attained finality. (ii) Whether in the facts and in circumstances of the case, the ITAT was justified in law in allowing set off of current year and brought forward losses and unabsorbed depreciation of M/s. Modern Terry Towels Ltd. against the income of the assessee company in directing to pass protective assessment order in case of assessee company presuming that no amalgamation has taken place following the scheme devised by the Hon ble Supreme Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the materials available on record. Taking into consideration all the facts and circumstances of the case, we have observed that such an issue has been decided by this Coordinate Bench in case of ACIT Vs. Modern Insulators Ltd. in ITA No.281/Jp/2010 dated 13.04.2011 for the assessment year 2007-08 by observing as under:- 2.19. We also agree with the view taken by the ld. CiT(A) that TDS was not required to be deducted at source on account of Circular No.786 dated 07.02.2000. The Circular No.7 of 22.10.2009 cdannot be considered retrospectively to make it applicable for payments before that date. This has been considered by Lucknow Bench in the case of DCIT vs. Sanjiv Gupta 50 DTR (Lucknow) Tribunal 225. 2.20 The Hob ble Apex Court in the case of G.E. India Technologies Centre (P) Ltd. Vs. CIT 327 ITR 456 has held that in case whole remittance is not chargeable in India then there is no question of tax at source being deducted. Since the tax at source is nor required to be deducted then Section 40(a) will not be applicable. It is further noticed that Section 40((a) (ia) refers to commission payable to a resident. Hence, this provision is not at all applicable. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding submissions of DRS with cutoff date on 31-03-2010 and direction at para 3(ii) shall remain stayed till the disposal of appeal. Even after the disposal of appeal by AAIFR, there will be an option to the assessee company total income file appeal before Hon'ble Jurisdictional High Court and Supreme Court. Considering these difficulties, I had directed the AO to pass both the substantive assessment and protective assessment in the case of the appellant. In case if the amalgamation scheme was not sanctioned by the AAIFR and higher Courts with effect from 01-01-2008 then the protective assessment completed by the AO shall prevail over the substantive assessment. I therefore, direct the AO to allow set off of current year losses and brought forward losses/unabsorbed depreciation of M/s. Modern Terry Towels Ltd. as per Section 72A against the income of the appellant. At the same time, the AO shall pass a protective assessment order in the case of the appellant for A.Y. 2009-10 presuming that no amalgamation has take place. This ground of appeal is allowed. 4.3 We have heard the rival contentions and perused the materials available on record. It is not imperative to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CIT(A)-II, Jaipur for A.Y. 2008-09 (Appeal No. 464/10-11, dated 27-06.2011) and for A.Y 2009-10 (Appeal No. 502/11-12, dated 20.03.2012) wherein the additions made by the Assessing Officer on the above issue have been upheld by the CIT(A) on protective basis, in view of the decision of the Supreme Court in the case of Marshall Sons and Co. (India) Ltd. vs. ITO (1997) 223 ITR 809. The relevant extract of the order of the CIT (A)-II, Jaipur for A.Y. 2009-10 is reproduced below:- The findings in para 4.1 (of the order of A.Y. 2008- 09) are relevant wherein it was held that prior to the date of sanction by BIFR and higher Courts, there was provision in the scheme that business done by Modern Terry Towels Ltd. shall be on behalf of the appellant company .. Considering these difficulties, I had directed the AO to pass both the substantive assessment and protective assessment in the case of the appellant. In case if the amalgamation scheme was not sanctioned by AAIFR and higher Courts with effect from 01-01-2008 then the protective assessment completed by the AO shall prevail over the substantive assessment. I therefore, direct the AO to allow set off of current year losses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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