TMI Blog2020 (12) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... e never brought to notice of Ld.AO regarding the merger and non-existence of M/s. Serendipity Infolabs Pvt. Ltd., immediately after 31/07/2017 in accordance with law. We find the assessment order being passed by Ld.AO in the name of M/s. Serendipity Infolabs Pvt. Ltd., is mere irregularity, which is rectifiable under 292B of the Act. Ld.AO is directed to take necessary steps to rectify the same. Addition u/s 56 (2)(viib) - As submitted by Ld.AR that assessee is a venture capital Undertaking receiving monies from other Venture Capital Funds - as assessee is governed by Regulation 2 of the Venture Capital Regulations as per section 10(23FB) and that provisions of section 56(viib) do not apply to assessee as the funds are received from non resident Venture Capital Funds - HELD THAT:- Authorities below have not considered the materials available on record to decide the issue on merits. We are therefore remanding the issue back to Ld.AO. Assessee is directed to file all necessary documents and evidences in support of its claim and to establish itself to be a Venture Capital Company. Ld.AO shall then consider the issue afresh in light of evidences/documents filed in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(3) on non-existent and merged entity - M/s. Serendipity Infolabs Private Limited (now amalgamated with ANI Technologies Private Limited). The order so passed on non-existent and merged entity is invalid, bad in law and liable to be quashed. 3. Ld.AR submitted that, additional ground relates to passing of assessment order under section 143(3) on a non-existent merged entity being M/s. Serendipity Info Labs Pvt. Ltd. Ld.AR submitted that the fact of merger of M/s. Serendipity in for Labs Pvt. Ltd. with M/s. ANI Technologies India Pvt. Ltd., was brought on record before Ld. AO, vide letter dated 21/12/2017 which is placed at page 123 of paper book. He submitted that no new facts needs to be investigated upon for adjudicating the additional ground and therefore the same may be admitted. 4. On the contrary Ld. Sr. DR could not controvert admission of the legal issue raised by assessee. 5. We have perused submissions advanced by both sides in light of records placed before us. 5.1. Ld. AR in support of his contention is placed reliance on decision of Hon'ble Supreme Court in case of National Thermal Power co. Ltd. vs. CIT reported in 229 ITR 383. 5.2. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the rate of depreciation claimed wide its reply dated 19/12/2017. 6.3. It was thus submitted by Ld. Sr. DR that, entire assessment proceedings carried out by Ld.AO was participated by the representative appearing for M/s. Serendipity Infolabs Pvt. Ltd., without any objection. He further submitted that income for financial year 01/04/2014 to 31/03/2015, filed in the name of M/s. Serendipity Infolabs Pvt. Ltd., was being assessed. Referring to the relevant dates of approval of merger by NCLT dated 28/07/2017 and its intimation by Ministry of corporate affairs dated 31/07/2017, she submitted that the scheme was made effective from 31/03/2015 being the last day of financial year relevant to assessment year under consideration. 6.4. Ld. Sr. DR submitted that, assessee had sufficient time to inform Ld.AO regarding the merger of M/s. Serendipity Infolabs Pvt. Ltd. with M/s. ANI Technologies Pvt. Ltd. However, 5 days prior to passing of assessment order, the same was informed to Ld.AO in the manner, which would not immediately come to the notice of assessing officer. She submitted that all the submissions filed by assessee before Ld.AO in response to notice under section 143 (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 Notice under section 143(2) was issued on 26/09/2013 Notice under section 143(2) was issued on 21/03/2016 Intimation regarding amalgamation to Ld.AO filed on 02/04/2013. Intimation regarding merger while furnishing certain details on 21/12/2017 Date of assessment order 11/03/2016 in the name of amalgamated company Date of assessment order: 26/12/2017 in the name of transferor company. 7.3. From the above, it is quite clear that, in the present facts of case, notice under section 143(2) was issued to M/s. Serendipity Infolabs Pvt. Ltd., much prior to date of approval of merger by Hon'ble NCLT, and that, the merger was approved during pendency of assessment before Ld.AO. One more fact brought to our notice by Ld. Sr. DR is that, replies to 143(2) notice are filed by assessee much after the date of approval of merger, and assessee never intimated the same to Ld.AO. She submitted that in final reply dated 21/12/2017 in an internal paragraph assessee intimated it the form of passing reference. 7.4. We also note that, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8.3. Before us, assessee is in appeal only in respect of addition amounting to ₹ 62,16,077/- under section 56(2)(viib) of the Act. 8.4. It is submitted by Ld.AR that assessee is a venture capital Undertaking receiving monies from other Venture Capital Funds. It has been stated that assessee is governed by Regulation 2 of the Venture Capital Regulations as per section 10(23FB) of the Act. He submitted that provisions of section 56(viib) do not apply to assessee as the funds are received from non resident Venture Capital Funds. 8.5. Ld.AR submitted that all the details in respect of the monies received by assessee were placed before authorities below. However Ld.CIT(A) held as under: 11. On the issue of addition of ₹ 6216,077/- made u/s. 56(2)(viib) of the Act, it is no doubt true that the Act permits appellant to chose DCF method and adopt the valuation by a Chartered Accountant In the present case however, the report of the Chartered Accountant clearly states that the report is based on information given by the management and the accompanying annexure 2 to the report contains disclaimers by the CA, which clearly indicates that the CA does not give an inde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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