GLINT INFRAPORJECTS P.LTD (KEYSTONE STOCKFIN PRIVATE LIMITED MERGED IN GLINT INFRAPROJECTS PRIVATE LIMITED), MUMBAI V. DCIT 9(3)(2), MUMBAI

CO 133/MUM/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5592 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: CHOUDHARY ARUNKUMAR SINGH
• Keywords: Opportunity of being heard; Question of law; Scheme of amalgamation
• Section: 143(3); 14A; 260A; 147; 68; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.5758/M/2017 ASSESSMENT YEAR: 2009-10 DCIT- 9(3)(2), 418, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 VS. M/S. GLINT INFRAPROJECTS PVT. LTD., (KEYSTONE STOCKFIN PVT. LTD. MERGED IN GLINT INFRAPROJECTS PVT. LTD.) 5 TH FLOOR, SUNTECK CENTRE, 37-40, SUBHASH ROAD, VILE PARLE (E), MUMBAI 400 057 PAN: AADCG5620L (APPELLANT) (R ESPONDENT) CO NO.133/M/2019 (ITA NO.5758/M/2017) ASSESSMENT YEAR: 2009-10 M/S. GLINT INFRAPROJECTS PVT. LTD., (KEYSTONE STOCKFIN PVT. LTD. MERGED IN GLINT INFRAPROJECTS PVT. LTD.) 5 TH FLOOR, SUNTECK CENTRE, 37-40, SUBHASH ROAD, VILE PARLE (E), MUMBAI 400 057 PAN: AADCG5620L VS. DCIT- 9(3)(2), 418, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI CHOUDHARY ARUNKUMAR SINGH, A.R . REVENUE BY : SHRI RAKESH JOSHI, D.R. DATE OF HEARING : 09.08.2019 DATE OF PRONOUNCEMENT : 15.10.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE APPEAL BY THE REVENUE AND THE CROSS OBJ ECTION BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORD ER DATED 15.04.2015 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. CO NO.133/M/2019 2. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS : I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN APPRECIATING THAT ASSESSEE HAD INTENTIONALLY EVADED THE REOPENING PROCEEDINGS OR NOT AVAILED OPPORTUNITY OF BEING HEARD WHICH FACT WAS MENTIONED BY HIMSELF IN HIS ORDER THAT ASSESSEE WAS NON-CO-OPERATIVE AND ASSESSEE DID NOT WANT TO PRODUCE EVIDENCE DURING THE ASSESSM ENT PROCEEDINGS. II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN MERELY LOOKING AT EVIDENCE ADDUCED BY THE ASSESSEE AND HAD NOT AVERTED TO ATTEMPTS MADE BY THE AO DURING THE C OURSE OF ASSESSMENT PROCEEDINGS AND ALSO NOT GIVEN AN OPPORTUNITY TO TH E AO WHILE ADMITTING THE EVIDENCE PRODUCED BEFORE HIM. III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE SHARE PREMI UM MONEY WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS A BENEFICIARY WHO HAS TAK EN ACCOMMODATION ENTRY OF SHARE PREMIUM MONEY AND FAILED TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF SHAREHOLDERS AND TO PROVE THE GENUINENESS OF TRANSA CTION. 3. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S UBMITTED BEFORE THE BENCH THAT HE WANTS TO ARGUE THE GROUND NO.2 FIRST WHICH IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ACTION OF THE AO IN PASSING THE ORDER IN THE NAME OF M/S. KEY STONE STOCK FIN PVT. LTD. A NONEXISTENT ENTITY WITHOUT CONSIDER ING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE FACTS IN BRIEF ARE THAT THE M/S KEYSTONE ST OCK FIN PVT LTD NOW MERGED WITH M/S. GLINT INFRA PROJECT PVT. L TD. FILED THE RETURN OF INCOME ON 29.09.2009 DECLARING AN INCOME OF RS. 1,63,520/-. THE CASE OF THE ASSESSEE WAS SELECTED F OR SCRUTINY AND ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE A CT ON 05.12.2011 ASSESSING THE TOTAL INCOME AT RS. 3,48, 800/- BY ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 3 MAKING AN ADDITION OF RS. 1,85,164/- U/S 14A OF THE ACT. M/S KEYSTONE STOCK FIN PVT LTD WAS MERGED WITH M/S. GLI NT INFRA PROJECT PVT. LTD. VIDE HIGH COURT ORDER DATED 17.06 .2011 W.E.F. 1.4.2010. THE SAME WAS INTIMATED TO THE AO ON 1.3.2 013 VIDE LETTER DATED 28.2.2013. THEREAFTER, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NO TICE UNDER SECTION 148 OF THE ACT ON 30.03.2014 IN THE NAME OF M/S KEYSTONE STOCK FIN PVT LTD. THE REOPENING OF THE C ASE WAS DONE ON THE BASIS OF INFORMATION RECEIVED FROM DIT (I&CI ) THROUGH CCIT, MUMBAI THAT ASSESSEE HAS ISSUED 430500 SHARE OF FACE VALUE RS.10/- EACH AT A PREMIUM OF RS.180/-. THE N OTICE ISSUED UNDER SECTION 148 OF THE ACT IN THE NAME OF NON EXI STENT COMPANY AND WAS SENT ON THE OLD ADDRESS AND COULD NOT BE COMPLIED WITH. THE EX-PARTE ASSESSMENT WAS FRAMED U/S 144 OF THE ACT R.W.S. 147 OF THE ACT ON 13.3.2015 BY MAKIN G AN ADDITION OF RS. 8.17 CR U/S 68 OF THE ACT BY TREA TING THE SHARE APPLICATION MONEY AS BOGUS. 5. THE ASSESSEE CHALLENGED THE ORDER OF AO BEING NU LLITY AND VOID AB-INITIO ON THE GROUND THAT THE NOTICE U/S 14 8 OF THE ACT DATED 30.3.2014 WAS ISSUED IN THE NAME OF NON EXIST ENT COMPANY M/S. KEY STONE STOCK FIN PVT. LTD. AND ASS ESSMENT ORDER WAS ALSO FRAMED ACCORDINGLY WHICH WAS NONEXIS TENT ENTITY W.E.F. 1.4.2010 VIDE HIGH COURT ORDER DATED 17.6.20 11 AND THEREFORE THE SAME WAS BAD IN LAW. HOWEVER, THE LD . CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY UPHOLDING T HE ORDER OF AO BY OBSERVING THAT THE ORDER PASSED BY THE AO IS CORRECT AND AS PER LAW AS THE SAME WAS PASSED ON THE BASIS OF I NFORMATION AVAILABLE IN HIS POSSESSION WHILE DELETING THE ADDI TION ON MERITS. ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 4 6. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE THE BEN CH THAT THE REASSESSMENT ORDER PASSED UNDER SECTION 144 REA D WITH SECTION 147 OF THE ACT IS NULLITY AND VOID AB-INITI O AS THE SAME IS PASSED IN THE NAME OF M/S. KEY STONE STOCK FIN PVT. LTD. WHICH STOOD MERGED WITH M/S. GLINT INFRA PROJECT PVT. LTD . VIDE HIGH COURT ORDER DATED 17.06.2011. THE LD. A.R. SUBMITT ED THAT THE ORDER PASSED BY THE AO IS BAD IN LAW AND THEREFORE HAS TO BE QUASHED. IN DEFENCE OF HIS ARGUMENTS THE LD. A.R. RELIED ON THE FOLLOWING DECISIONS: 1. PR. CIT VS. BMA CAPFIN LTD. (2018) 100 TAXMANN.C OM 330 (SC). 2. PR. CIT BMA CAPFIN LTD. (2018) 100 TAXMANN.COM 329 (DEL.) 3. DHARMNATH SHARES & SERVICES (P.) LTD. VS. ACIT (2018) 94 TAXMANN.COM 458 (GUJARAT) 4. ACIT VS. DHARMNATH SHARES AND SERVICES (P.) LTD. (2018) 100 TAXMAN.COM 416 (SC) 5. PR. CIT VS. MARUTI SUZUKI INDIA LTD. (2019) 107 TAXMANN.COM 375 (SC) THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE THE BENCH THAT IN VIEW OF THE ABOVE DECISIONS , THE ASSESSMENT OR DER PASSED BY THE AO U/S 144 R.W.S. 147 OF THE ACT MAY BE QUASHE D. 7. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDER OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSMENT ORDER HAS BEEN FRAMED IN THE NAME OF M/S. KEY STONE STOCK FIN PVT. LTD. WHICH MERGED WITH M/S. GLINT INFRA PROJECT PVT. LTD . VIDE ORDER DATED 17.06.2011 OF THE HONBLE HIGH COURT. THE L D. D.R. SUBMITTED THAT EVEN THOUGH THE ENTITY IS MERGED WIT H ANOTHER ENTITY BUT THE SAME DOES NOT BECOME NONEXISTENT AS THE SAME ENTITY IS CONVERTED INTO ANOTHER ENTITY AND THEREFO RE THE ARGUMENTS ADVANCED BY THE LD. A.R. SEEKING THE QUAS HING OF ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 5 ASSESSMENT IS NOT CORRECT AND GROUNDS RAISED BY THE ASSESSEE MAY BE DISMISSED. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE ERSTWHILE ASSESSEE M/S. KEY STONE STOCK FIN PVT. LTD. WAS MERGED WITH M/S. GLINT INFRA PROJECT PVT. LTD. VIDE HIGH COURT ORDER DATED 17.06 .2011 W.E.F. 1.4.2010 AND THEREFORE THE SAID ASSESSEE BECAME NO NEXISTENT W.E.F 1.4.2010 AND THE NEW ENTITY M/S. GLINT INFRA PROJECT PVT. LTD. CAME INTO BEING AND THEREFORE THE RE-ASSESSMEN T PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT AND CONSE QUENT ASSESSMENT ORDER PASSED BY THE AO IN THE NAME OF N ONEXISTENT COMPANY IS NULLITY AND VOID AB-INITIO AND CONSEQUEN TLY CAN NOT BE SUSTAINED. IN THE CASE OF PR. CIT VS. MARUTI SU ZUKI INDIA LTD. (SUPRA) THE HONBLE APEX COURT HAS HELD THAT ASSESS MENT MADE IN THE NAME OF SUZUKI POWER TRAIN INDIA LTD. FOR AS SESSMENT YEAR 2012-13 IS NULLITY SINCE THE ENTITY HAS BEEN A MALGAMATED WITH MARUTI SUZUKI INDIA LTD. UNDER THE SCHEME OF AMALGAMATION AND WAS NOT IN EXISTENCE. IN THE CASE OF PR. CIT VS. BMA CAPFIN LTD. (SUPRA) THE HONBLE APEX COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE R EVENUE AGAINST THE ORDER OF HIGH COURT IN THE CASE OF PR. CIT VS. BMA CAPFIN LTD. WHEREIN THE HONBLE HIGH COURT HAS HELD AS UND ER: 3. AGAINST THE DECISION OF THE HIGH COURT FOR AY 2 011-12, A SPECIAL LEAVE PETITION WAS DISMISSED BY A TWO JUDGE BENCH OF THIS COURT ON 16 JULY 2018 WITH THE FOLLOWING OBSERVATIONS: 'HEARD LEARNED COUNSEL FOR THE PARTIES. DELAY CONDONED. IN VIEW OF THE ORDER DATED 02.11.2017 PASSED BY THI S COURT IN C.I. T., NEW DELHI V. M/S. SPICE ENFOTAINMENT LID (CIVIL APPEAL NO. 285 OF 2014 ETC. ETC.), THIS SPECIAL LEAVE PETITION ALSO STANDS DISMISSED. PENDING APPLICATIONS, IF ANY, SHALL STAND DISPOSED OF.' ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 6 ON BEHALF OF THE RESPONDENT, IT HAS BEEN URGED THAT IN VIEW OF THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN RELATION TO AY 2011-12. T HE SAME COURSE OF ACTION MUST FOLLOW IN THE PRESENT CASE WHICH DEALS WITH THE ASS ESSMENT FOR AY 2012-13. 4. WE HAVE HEARD SUBMISSIONS ON BEHALF OF THE APPEL LANT BY MR ZOHEB HOSSAIN. LEARNED COUNSEL AND FOR THE RESPONDENTS BY MR AJAY VOHRA, LEARNED SENIOR COUNSEL. IN ORDER TO APPRECIATE THE NATURE OF THE CONTROVERS Y, A NARRATION OF THE FACTS WOULD BE INSTRUCTIVE. 9. SIMILARLY, THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. ACIT VS. DHARMNATH SHARES AND SERVICES (P.) LTD . (SUPRA) DISMISSED THE SPECIAL LEAVE PETITION OF THE REVENUE AND THE ORDER OF THE HONBLE HIGH COURT WAS AFFIRMED IN WHICH THE HONBLE HIGH COURT HAS HELD AS UNDER: IT IS NOT IN DISPUTE THAT THE ASSESSEE-COMPANY AMA LGAMATED WITH 'D' BY VIRTUE OF THE JUDGMENT OF HIGH COURT DATED 4-5-2012. THOUGH T HIS ORDER WAS PASSED ON 4-5- 2012. THOUGH THIS ORDER WAS PASSED ON 4-5-2012, TH E EFFECTIVE DATE OF AMALGAMATION WAS 1-4-2010. DIVISION BENCH IN CASE OF KHURANA ENGG. LTD. V. DY. CIT (2014) 364 ITR 600/[20131 217 TAXMAN 75 (MAG./34 TA XMANN.COM 261 (GUJ.) HAD HELD THAT ONCE THE ASSESSEE-COMPANY HAD AMALGAMATED WITH THE TRANSFEREE COMPANY, ITS INDEPENDENT EXISTENCE DID NOT SURVIVE, AND THEREFORE, IT WOULD NO LONGER BE AMENABLE TO ASSESSMENT PROCEEDINGS. FOR S UCH PURPOSE, THE COURT HAD QUASHED THE NOTICE ON THE COMPANY WHICH HAD ALREADY MERGED, FOR PRODUCING DOCUMENTS FOR ASSESSMENT. UNDER THE CIRCUMSTANCES, THE NOTICES IN THE PRESENT CASE WOULD ALSO BE INVALID. THE REVENUE, HOWEVER, MADE FAINT ATTEMPT TO ARGUE THAT THE IMPUGNED NOTICES HAVE BEEN ISSUED NOT TO THE TRANSFEROR COMPANY, BUT TO ' D'. SUCH CONTENTION HAS TO BE REJECTED OUT OF HAND. THE NOTICE ITSELF IS ADDRESSE D TO THE PRINCIPAL OFFICER/DIRECTOR OF [THE PRESENT ASSESSEE]. BY REFERENCE, IT ALSO RE CORDS THAT THE COMPANY HAS NOW MERGED WITH 'D' LIMITED, NEVERTHELESS, THE NOTICE I S ISSUED TO PRESENT ASSESSEE. HAD THE REVENUE DESIRED TO ISSUE NOTICE OF REASSESSMENT TO 'D 1 LIMITED, THERE WOULD HAVE BEEN SIX DIFFERENT NOTICES FOR THE SAME ASSESS MENT YEAR, AS IN THE PRESENT CASE. IT IS ALSO NOTICED THAT THE VERY SAME INCOME HAS ALSO BEEN TAXED IN THE HANDS OF 'D' LIMITED. 10. THE HONBLE SUPREME COURT IN THE CASE OF PCIT V S. MARUTI SUZUKI INDIA LTD. (SUPRA) HAS OBSERVED AND HELD AS UNDER: THIS APPEAL ARISES FROM A JUDGMENT OF A DIVISION B ENCH OF THE DELHI HIGH COURT DATED 9 JANUARY 2018 WHICH UPHELD THE DECISION OF T HE INCOME TAX APPELLATE TRIBUNAL 1 . THE TRIBUNAL HELD THAT THE ASSESSMENT MADE IN THE NAME OF SUZUKI POWERTRAIN INDIA LIMITED 2 FOR ASSESSMENT YEAR' 2012-13 IS A NULLITY SINCE TH E ENTITY HAD BEEN AMALGAMATED WITH MARUTI SUZUKI INDIA LIMIT ED 4 UNDER AN APPROVED SCHEME OF AMALGAMATION AND WAS NOT IN EXISTENCE. TH E HIGH COURT, WHILE AFFIRMING ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 7 THIS VIEW OF THE TRIBUNAL FOLLOWED ITS OWN DECISION FOR AY 2011-12 IN PRINCIPAL COMMISSIONER OF INCOME TAX --6, NEW DELHI V MARUTI SUZUKI INDIA LIMITED (SUCCESSOR OF SPIL[2017] 397 ITR 681 (DEL.) 5 ('MARUTI SUZUKI') . HOLDING THAT NO QUESTION OF LAW AROSE, THE HIGH COURT DISMISSED THE APPEAL UNDER SE CTION 260A OF THE INCOME TAX ACT 1961 11. IN THE PRESENT CASE ALSO THE RE-ASSESSMENT PROC EEDINGS AND THE CONSEQUENT ASSESSMENT HAVE BEEN FRAMED IN THE N AME OF ENTITY WHICH IS NO MORE EXISTENT AS THE SAME STOOD MERGED WITH THE NEW ENTITY, WE THEREFORE, FOLLOWING THE RATIO L AID DOWN IN THE AFORESAID DECISIONS, ARE INCLINED TO QUASH THE ASSE SSMENT FRAMED BY THE AO U/S 144 R.W.S. 147 OF THE ACT. AC CORDINGLY, THE GROUND NO. 2 IN THE CROSS OBJECTION OF THE ASS ESSEE IS ALLOWED. 12. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER AS STATED ABOVE, THE APPEAL OF THE REVENUE BECOMES INF RUCTUOUS AND IS DISMISSED ACCORDINGLY. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.10.2019. SD/- SD/- ( AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 15.10.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ ITA NO.5758/M/2017 CO NO.133/M/2019 M/S. GLINT INFRAPROJECTS PVT. LTD. 8 BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.