9911796707
TMI Blog2025 (5) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee for adjudication. 3. The assessee has raised the following grounds of appeal: (1) The learned CIT(A)-3, Chennai, grossly erred in holding that the AO could have only reinstated the original assessment order, in the facts and circumstances of the case and in law. (2) The learned CIT(A) has grossly erred in not considering that the AO did not carry out the computation of income, as specifically directed by the Hon'ble ITAT, in its order in ITA No.584/Mds/2017, dated 26.02.2018, rendering his order unsustainable. (3) The learned CIT(A) ought to have quashed the order of the AO, reinstating he income, as per the original order, as being not in conformity with the findings recorded by the Hon'ble ITAT, in its order, in ITA No.584/Mds/2017, dated 26.02.2018, in the facts and circumstances of the case and in law. (4) The learned CIT(A), ought to have held that the order of the AO, giving effect to the order of the Hon'ble ITAT, in ITA No.584/Mds/2017, dated 26.02.2018, was also clearly barred by limitation of time, in the facts and circumstances of the case and in law. (5) The learned CIT(A) is wrong in confirming the order of assessment, impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan waiver of Bank of Ceylon has already been included as income by the assessee in previous year. Also check how much is the interest component in this. This interest has to be an allowable business expense. 5. Details relating to the above issues were called for from the assessee vide letter dated 20.07.2018, there was no response from the assessee till the date of passing of this order. Therefore, it is amply clear that the assessee has no substantiating evidence for its claimed. 6. Hence the additions made vide order u/s 143(3) r.w.s. 147 dated 30.12.2010 is sustained and the total income is computed as under: Income assessed as per Assessment Order dt. 30.12.2010 9,81,88,359 Income assessed as per this order 9,81,88,359 7. Credit to prepaid taxes and self assessment tax are given as available in ITD. Interest under section 234A, 234B and 234C are charged as per law. Demand notice u/s 156 is enclosed. 7. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) - 3, Chennai. Before the ld.CIT(A), the assessee filed a detailed written submission in respect of delay in passing the order giving effect by the AO and hence the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 47(iv) and consequently, immediately after transfer the cost of acquisition of assets in the hands of the Subsidiary KOIL will be the cost of acquisition in the hands of the Holding Company by section 49(1)(iii)(e) of the Act. * Subsequent to transfer of the undertaking, KICL transferred its shareholding in KOIL to the promoters of the assessee Company on 06.05.1997. With the transfer of these shares KOIL ceased to be 100% subsidiary of KICL. KOIL changed its name to PLR Industries (PLI) with effect from 12.05.1997 (Page 28 of the paper books). * Once KOIL/PLI ceased to be subsidiary of KICL within 7 years of transfer of undertaking, the capital gains on the original transfer ceases to be exempt in view of provisions of section 47A and the capital gains originally exempt requires to be charged in the hands of KICL for AY 1997-98.Consequently, as per section 49(3) of the Act, the cost of acquisition of the assets in the hands of KOIL/PLI will be the actual cost of acquisition i.e. cost at which KOIL/PLI acquired the asset at the value as determined by Stamp Authorities and disclosed in the Books. * Thus, after 06.05.1997 on transfer of shares by KICL, cost of acquis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2 has held that finding upon verification about the transfer be necessarily required for verification, ignoring that both the AO and the ld.CIT(A) has categorically confirmed transfer of shares by KICL. However, in the next sentence, the ITAT has gone ahead accepting assessee's contention and has not directed any verification. * Therefore, the transfer of shares of KOIL/PLI by KICL on 06.05.1997 has been accepted by the AO, the CIT(A) and the ITAT in the first round in ITA No.584/Mds/2017 dt.26.02.2018 and requires no further verification. Hence the cost of acquisition of the land in the hands of the assessee can never be the cost of acquisition of the land in the hands of KICL but it will be cost of acquisition of the land in the hands of KOIL/PLI as per the Transfer deed and valued by the Stamp Authorities. Cost of acquisition of land in the hands of KOIL/PLI * * The value of land and building at the time of transfer on 03.02.1997 has been determined at Rs. 6.07 Crores by Stamp Authorities (Page 19 of PB 1) and the same was reflected in the books of KOIL/PLI as on 31.03.1998 as part of its Fixed Asset schedule (Page 50 of the Paper Book - 1). * The ld.AR further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not proved whether this amount has been allowed as deduction earlier particularly as in case of interest outstanding amount would not have been allowed earlier in view of the disallowance under the provisions of section 43B regarding non- payment. Hence disallowance u/s. 41(1) should be deleted. 12. Per contra the ld. DR relied on the orders of lower authorities. 13. We have heard the rival contentions perused the material available on record and gone through the orders along with paper books submitted. 14. The first issue to be decided is in respect of considering the cost of acquisition against sale of immovable property by the assessee during the A.Y.2005-16. The undisputed fact is that the assessee is the owner of the land and building has sold the same for a sale consideration of Rs. 10.00 Crores. Let us understand the flow of transactions to decide the value to be adopted for cost of acquisition for arriving the long-term capital gain in the hands of the assessee for the impugned assessment year: - KICL transferred textile mill undertaking to its wholly owned subsidiary KOIL on 03.02.1997 for a consideration of Rs. 1.00 Crore. (Value of land Rs. 4.57 Crores, Buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the impugned asset which has been recorded by the Company KICL (before the transfer of business of textile unit) for the purpose of computing the long term capital gain on the sale of immovable property in the hands of assessee for a consideration of Rs. 10.00 Crores. The company KICL had not discharged the taxes on the amounts realized / accepted on account of sale of textile business unit to its subsidiary for Rs. 9.70 Crores, during the financial year 1996-97 (i.e. 05.12.1996), after obtaining approval from the appropriate authority of Income Tax department (24.01.1997), since the slump sale was between the holding and subsidiary company, which was exempt from capital gain tax as per section 47(iv) of the Act. Therefore, in the present factual matrix in our considered opinion the revenue has erred in considering the book value of the transferor company, after the transaction of slump sale with a separate consideration based on the transfer deed took place and accordingly the values of the asset recorded in the transferee company (assessee) as per the section 49(1)(iii)(e) of the Act. However, we note that the transaction of slump sale and consequential gain/income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
