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TMI Blog2018 (8) TMI 1873X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23.02.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The first issue in this appeal of Revenue is against the order of CIT(A) allowing the set off of carry forward of loss of capital gains in the case of demerger. For this Revenue has raised the following ground No. 1: - "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing set off of carry forward of loss of capital gains in the case of demerger when no such provision exists in the I. T. Act, 1961." 3. Briefly stated facts are that the assessee company during the AY 2011-12, demerged a part of its business to one Ramrod Advisors Pvt. Ltd. i.e. the resulting company. The said demerger was approved unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the decision of Mumbai Tribunal in the case of Clariant Chemicals (I) Ltd. vs. ACIT in IT Appeal Nos. 4281 & 4983/Mum/2011 vide order dated 19 Sept 2014. Aggrieved, assessee preferred the appeal before CIT(A). 4. The CIT(A) allowed the claim of the assessee by observing in Para 6.6. as under: - "6.6 I have carefully considered the rival submissions and the facts of the case. During the financial year 201I-12, one unit of Brandon and Co. Pvt. Ltd. demerged with a new company which came into existence in the name of M/s Ramrod Advisors Pvt Ltd. Scheme of the merger "as approved by the Hon'ble Bombay High Court. The case of the appellant is that the amalgamating company i.e. Brandon and Co. Pvt. Ltd. is entitled for set off of long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t off during the year under consideration against long term capital gain on tenancy rights. It was claimed that the full details of loss incurred during the year have already been furnished before AO vide letter dated. 14.10.2014. Time and again, it was claimed that the loss relating to this very assessee and the same has been set off as per the provisions of section 74 of the Act, which is the only provision of income dealing with carry forward and set off of such capital loss. The learned Counsel for the assessee before us also contended that there is no bar in section 74 to set off of the said loss and it was also clarified that there was no loss claimed or set off in the hands of Ramrod Advisors Pvt. Ltd., the resulting company. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. The normal principle in the case of loss is that the loss of an amalgamating company dies when the said company is amalgamated because the company itself dies or comes to an end. He explained that the context with the Tribunal pointed out that there should be a specific provision in section 74 of the Act, if capital loss of amalgamating company is to be set off in the hands of an amalgamated company, after amalgamation. We find that this was not the case of assessee setting of its own loss but this was the case of loss of different company being claimed by assessee and Mumbai Tribunal decided accordingly. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly allowed the claim of the assessee and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e MACF credit can he carried forward in the appellant company's case and not of the merged company namely M/s Ramrod Advisors Pvt. Ltd. Therefore, Ground No. 2 is allowed in this case." Aggrieved, now Revenue is in appeal before Tribunal. 9. The learned Sr. DR supported the orders of the AO and on the other hand, the learned Chartered Accountant argued on behalf of the assessee. 10. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the MAT credit represents the excess tax paid under MAT over the tax payable under the normal provisions of the Act by the assessee itself in the earlier years. Thus, the MAT credit is that of the assessee itself and not of the demerged company. There ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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