M/s. Micra India (Pvt.) Ltd., New Delhi V. ACIT, New Delhi

CO 121/DEL/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7649 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 23-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: GUNJAN P RASAD
• Keywords: Depreciation; Validity of assessment
• Section: 69C; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G.D.AGARWAL, VICE PRESIDENT AND SHRI I.C.SUDHIR, JUDICIAL MEMBER I.T.A .NOS.-1060 TO 1065/DEL./2012 ASSESSMENT YEARS -2003-04 TO 2008-09 ACIT, VS. MICRA INDIA PVT. LTD., CENT.CIRCLE 21, ROOM NO-344, (AMALGAMATED WITH M/S DYNAMIC BUILDMART (P) LTD.) ARA CENTRE, E-2, B-2/42, JANAKPURI, JHANDEWALAN EXTN., NEW DELHI-57. NEW DELHI-55. PAN : AAACM6323P (APPELLANT) (RESPONDENT) C.OS.-121 TO 126/DEL./2012 (IN I.T.A .NOS.-1060 TO 1065/DEL./2012) (ASSESSMENT YEARS -2003-04 TO 2008-09) MICRA INDIA PVT. LTD., VS. ACIT, (AMALGAMATED WITH M/S DYNAMIC BUILDMART (P) LTD.) CENT.CIRCLE 21, ROOM NO-344, B-2/42, JANAKPURI, ARA CENTRE, E-2, NEW DELHI-57. JHANDEWALAN EXTN., NEW DELHI-55 PAN : AAACM6323P (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GUNJAN PRASAD, CIT DR RESPONDENT BY: SH. KAPIL GOEL, ADV. ORDER PER BENCH THE COMMON FIRST APPEAL ORDER HAS BEEN QUESTIONED B Y THE PARTIES ON COMMON GROUNDS OF THEIR RESPECTIVE APPEALS/CROSS-OB JECTIONS. I.T.A .NOS.-1060 TO 1065/DEL./2012 2 1. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING COMMON GROUNDS IN HIS APPEALS:- (1). THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITI ON OF RS. 34,79,422/- MADE BY THE ASSESSING OFFICER U/S 69C O F THE INCOME TAX ACT, 1961 ON ACCOUNT OF UNEXPLAINED PURC HASES. (2). THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN ACCEPTING THE TRANSACTION OF SA LE AND PURCHASE MADE IN CASH AS GENUINE. (3) THAT THE COMMISSIONER OF INCOME TAX (APPEALS0 ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITI ON OF RS. 1,48,020/- MADE BY THE ASSESSING OFFICER BY WAY OF 50% DISALLOWANCE OF EXPENDITURE AND DEPRECIATION CLAIME D BY THE ASSESSEE. (4) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE AS SESSMENT ORDER PASSED ON THE ASSESSEE IS A NULLITY AS THE AS SESSEE COMPANY STOOD DISSOLVED ON AMALGAMATION WITH M/S DY NAMIC BUILDMART PVT. LTD. (5) (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NO T TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AM END ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. 2. THE ASSESSEE, ON THE OTHER HAND, HAS OBJECTED FI RST APPELLATE ORDERS IN ITS CROSS-OBJECTIONS ON THE FOLLOWING COMMON BASIS :- (1) THAT IN VIEW OF THE FACTS & CIRCUMSTANCES OF THE C ASE AND IN LAW THE CIT(A) HAS ERRED IN NOT HOLDING THAT THE NOTICE ISSUED U/S 153C AND THE ASSESSMENT ORDER PASSED U/S 153C/143(3) ARE ILLEGAL, BAD IN LAW, WITHOUT JURISD ICTION AND BARRED BY TIME LIMITATION. (2) THAT THE DOCUMENTS FOUND DURING SEARCH PROCEEDINGS, AS REFERRED TO IN THE SATISFACTION NOTE, DO NOT BELONG TO ASSESSEE AS THE SAME WERE PART OF WORKING PAPERS OF THE C.A SH. B.K.DHINGRA IN WHOSE OFFICE THE SEARCH WAS CONDUCTE D. HENCE, THE NOTICE ISSUED U/S 153C, BASED ON SAID DOCUMENTS , IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. I.T.A .NOS.-1060 TO 1065/DEL./2012 3 (3) THAT ADMITTEDLY, AS RECORDED IN THE SATISFACTION NO TE, NO SEIZED DOCUMENT RELATED TO THE RELEVANT ASSESSMENT YEAR WAS FOUND AND THE SEIZED PAPER REFERRED IN THE SAID SAT ISFACTION NOTE WERE DULY REFLECTED IN THE REGULAR BOOKS OF A/CIT(A ) AND NO INCRIMINATING MATERIAL WAS FOUND. HENCE THE NOTICE ISSUED U/S 153C IS ILLEGAL, BAD IN LAW & WITHOUT JURISDICTION. (4) THAT IN VIEW OF THE FACTS & CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THA T THE ASSESSMENT HAS BEEN FRAMED IN CONFORMITY WITH STATU TORY PROVISIONS OF SECTION 153C R/W SECTION 153A OF THE ACT. (5) THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN FACTS AND ON LAW IN UPHOLDI NG THE VALIDITY OF ASSESSMENT PARTICULARLY WHEN THE SEIZED DOCUMENT WERE NEVER HANDED OVER TO THE A.O WHO FRAMED THE AS SESSMENT AND THE ADDITIONS MADE ARE ILLEGAL, BAD IN LAW & WI THOUT JURISDICTION. (6) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSMENT PROCEEDING FOR THE YEAR UNDER APPEAL WAS NOT PENDING ON THE DATE OF THE REC ORDING OF SATISFACTION U/S 153C OF THE ACT AND ACCORDINGLY TH E SAME DID NOT ABATE FOR THE PURPOSE OF INITIATION OF PROCEEDI NGS U/S 153C AND AS SUCH THE ASSESSMENT BEING BAD IN LAW DESERVE S TO BE QUASHED. (7) THAT THE RESPONDENT RESERVES THE RIGHT TO ADD/AMEND /ALTER THE GROUNDS OF CROSS OBJECTION. 3. ON PERUSAL OF THE ABOVE GROUNDS/CROSS-OBJECTIONS , WE FIND THAT THE ISSUE RAISED IN GROUND NO-4 OF THE APPEAL PREFERRED BY TH E REVENUE, GOES TO THE ROOT OF THE MATTER AS IN THIS GROUND, THE ISSUE RAISED IS AS TO WHETHER THE ASSESSMENT ORDER PASSED ON THE ASSESSEE IS NULLITY SINCE THE ASSESSE E COMPANY STOOD DISSOLVED ON AMALGAMATION WITH M/S DYNAMIC BUILDMART PVT. LTD.? WE THUS PREFERRED TO ADJUDICATE UPON ISSUE RAISED IN GROUND NO-4, FIRSTL Y. I.T.A .NOS.-1060 TO 1065/DEL./2012 4 4. THE REVENUE HAS QUESTIONED THE ACTION OF LD. CIT (A) IN HOLDING THAT THE ASSESSMENT ORDER PASSED ON THE ASSESSEE, IS A NULLI TY AS THE ASSESSEE COMPANY STOOD DISSOLVED ON AMALGAMATION WITH M/S DYNAMIC BUILDMAR T PVT. LTD. IN SUPPORT OF THIS GROUND, THE LD. DR HAS BASICALLY PLACED RELIAN CE ON THE ASSESSMENT ORDER. THE LD. AR, ON THE OTHER HAND, TRIED TO JUSTIFY THE FIR ST APPELLATE ORDER ON THE ISSUE. HE POINTED OUT FURTHER THAT IN REPLY DATED 22.11.2010 OF THE ASSESSEE TO THE LETTER DATED 12.11.2010 ISSUED BY THE ASSESSING OFFICER, THE ASS ESSEE, IN POINT NO-28 OF THE SAID LETTER, HAD POINTED OUT TO THE ASSESSING OFFICER TH AT THE ASSESSEE COMPANY HAD ALREADY BEEN AMALGAMATED WITH M/S DYNAMIC BUILDMART PVT. LTD. VIDE HONBLE DELHI HIGH COURT ORDER DATED 22.12.2009 PASSED U/S 391(2) AND 394 OF THE COMPANIES ACT, 1956. HE SUBMITTED THAT A COPY OF T HE SAID ORDER OF THE HON'BLE DELHI HIGH COURT WAS ALSO ENCLOSED WITH THE SAID LE TTER. DESPITE THAT THE ASSESSING OFFICER PROCEEDED WITH THE ASSESSMENT, CONTENDED TH E LD. AR. 5. ON CONSIDERATION OF THE ABOVE SUBMISSIONS, WE FI ND FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE ASSESSING OFFICER IN ITS REPORT TO THE LD. CIT(A), AS MENTIONED IN PARA NO-16 OF THE FIRST APPELLATE ORDE R, HAS ADMITTED THE FACT THAT THE ASSESSEE COMPANY WAS AMALGAMATED WITH M/S DYNAMIC B UILDMART PVT. LTD. DURING THE ASSESSMENT YEAR 2009-10. IN THE ASSESSMENT ORD ER PASSED U/S 153C OF THE INCOME TAX ACT, 1961, NAME OF THE TRANSFEREE COMPAN Y I.E M/S DYNAMIC BUILDMART PVT. LTD. WAS ALSO MENTIONED. IT ALSO RE MAINED ADMITTED FACT THAT NO NOTICE U/S 143(2)/142(1) OF THE INCOME TAX ACT, WAS ISSUED TO M/S DYNAMIC I.T.A .NOS.-1060 TO 1065/DEL./2012 5 BUILDMART PVT. LTD, THE TRANSFEREE COMPANY AND IT ( TRANSFEREE COMPANY) DID NOT PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. UNDER T HESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT LD. CIT(A) RESPECTFULLY FOLLOWING THE DECISIONS MENTIONED BELOW, HAS RIGHTLY HELD THAT ASSESSMENT ORDER PASSED ON TH E ASSESSEE COMPANY IS A NULLITY:- A) IMPSAT (P) LTD. VS INCOME TAX OFFICER, ITAT, DELHI A BENCH ITA NO. 1430/DEL/2004 DATED 28.07.2004; 2005 TTJ (D EL) 552; (2004) 91 ITD 354 (DEL); B) COMMISSIONER OF INCOME TAX VS. VIVED MARKETING SERV ICING PVT. LTD. ITA NO. 273/2009. C) CIT VS EXPRESS NEWSPAPERS LTD. (1960) 40 ITR 38 (MA D) : (1960) TAX 13(3)-282; D) COMMISSIONER OF INCOME TAX VS AMARCHAND N. SHROFF ( 1963) 48 ITR 59 (SC); E) I K AGENCIES PVT. LTD. VS COMMISSIONER OF WEALTH TA X, KOL- III, JUDGEMENT DATED 11 TH MARCH 2011. F) TRIVENI ENGINEERING & INDUSTRIES LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, ITAT DELHI WT BENCH, (2 005) 93 TTJ (DEL) 806: (2005) 93 ITD 561; G) CENTURY ENKA LTD. VS DEPUTY COMMISSIONER OF ON 1 4 FEBRUARY, 2006: 2006 101 ITD 489 MUM, 2008 303 ITR 1 MUM; H) PAMPASAR DISTILLERY LTD VS. ASSISTANT COMMISSIONER OF INCOME TAX, ITAT, KOLKATA E BENCH, (2007) 15 SOT 33 1 (KOL); I) COMMISSIONER OF INCOME TAX VS. KURBAN HUSSAIN IBRAH IMJI MITHIBORWALA, 1973 CTR (SC) 454; (1971) 82 ITR 821 (SC); J) SPICE3 ENTERTAINMENT LIMITED VS CIT ITA 475 & 476 O F 2011. 6. WE FULLY CONCUR WITH THE FINDING OF THE LD. CIT( A) THAT A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JU RISTIC PERSON. IT TAKES ITS BIRTH AND GETS LIFE WITH INCORPORATION AND IT DIES WITH T HE DISSOLUTION AS PER THE PROVISION OF THE COMPANIES ACT. ON AMALGAMATION, THE COMPANY SEIZES TO EXIST IN THE EYES OF THE LAW. THUS, ASSESSMENT UPON A DISSOLVED COMP ANY IS IMPERMISSIBLE AS THERE I.T.A .NOS.-1060 TO 1065/DEL./2012 6 IS NO PROVISIONS IN INCOME TAX ACT TO MAKE AN ASSES SMENT THEREUPON. LD. CIT(A), IN OUR VIEW, HAS THEREFORE, RIGHTLY HELD TH AT ASSESSMENT ON A COMPANY WHICH HAS BEEN DISSOLVED BY AMALGAMATION U/S 391 AN D 394 OF THE COMPANIES ACT, 1956 IS INVALID. ADMITTEDLY, THE ASSESSEE COMPANY IN THE PRESENT CASE STOOD DISSOLVED ON 22.12.2009 ON AMALGAMATION WITH M/S DY NAMIC BUILDMART PVT. LTD AND THE ASSESSMENT ORDER IN THE PRESENT CASE HAS BE EN FRAMED ON 31.12.2010. THE FIRST APPELLATE ORDER ON THE ISSUE IS THUS UPHELD. THE GROUND NO-4 IS ACCORDINGLY REJECTED. 7. IN A VIEW OF THE ABOVE FINDING ON THE MAINTAINAB ILITY OF THE ASSESSMENT ORDER ITSELF, WHICH HELD TO BE A NULLITY, THE ISSUE RAISE D IN THE OTHER GROUNDS OF THE APPEALS PREFERRED BY THE REVENUE AND CROSS-OBJECTIONS RAISE D BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THEY DO NOT NEED ADJUDICATION. 8. CONSEQUENTLY, APPEALS PREFERRED BY THE REVENUE A ND CROSS-OBJECTIONS RAISED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.09.2012. SD/- SD/- (G.D.AGARWAL) (I.C.SUDHIR) VICE PRESIDENT JUDICIAL MEMBER DATED: 21/09/2012 *AMIT KUMAR* I.T.A .NOS.-1060 TO 1065/DEL./2012 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI