RSM Builders & Securities Pvt. Ltd., Kolkata V. ACIT, CC-XIX, Kolkata, Kolkata

ITA 165/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48072 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 24-01-2011
• Court: TRIBUNAL
• Department Lawyers: S K MALAKAR
• Assessee Lawyers: S L KOCHAR
• Keywords: Opportunity of being heard; Scheme of amalgamation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] # # # # / I.T.A NO. 165/KOL/2011 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2005-06 RSM BUILDERS & SECURITIES PVT. LTD. VS ASSISTANT COMMISSIONER OF INCOME-TAX (PAN-AABCR 3143 B) CENTRAL CIRCLE-XIX, KOLKATA. ( )* /APPELLANT ) (+,)*/ RESPONDENT ) FOR THE APPELLANT: SHRI S. L. KOCHAR FOR THE RESPONDENT: SHRI S. K. MALAKAR !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A), CENTRAL II, KOLKATA IN APPEAL NO.85/CC-XIX/CIT(A)-CENT-II/KOL./07-08 DA TED 28.10.2010. THE ASSESSMENT WAS FRAMED BY ACIT, CC-XIX, KOLKATA U/S.143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2005-06 VIDE HIS ORDER DATED 26.11.2007. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF PRELIMINARY EXPENSES . FOR THIS, THE ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,71,679/- CLAIMED BY THE APPELLANT TOWARDS PREL IMINARY EXPENSES. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT NEITHER THE CIT(A) NOR THE ASSESSING OFFICER HAS EXAMINED THE CLAIM OF THE ASSESSEE VIZ. A VIZ. THE PROVISIONS OF SECTION 35D OF THE ACT. HE STATED THAT THE COMP LETE DETAILS WERE FILED BEFORE THE LOWER AUTHORITIES BUT THEY HAVE NOT GONE INTO THESE DETAILS. HE NARRATED THAT PRELIMINARY EXPENSES WERE INCURRED IN A.Y 2001-02 IN DEEPLOK IN VESTMENTS & FINANCE CO. LTD. & RSM TEA CO. LTD. AT RS.3,75,000/- & RS.3,75,000/- R ESPECTIVELY WHICH WERE CLAIMED FOR DEDUCTION @ 20% (I.E. ONE-FIFTH) SINCE A.Y 2001 -02. SINCE THESE TWO COMPANIES WERE AMALGAMATED WITH EFFECT FROM 01.04.2003 WITH T HE APPELLANT (VIDE ORDER OF THE 2 ITA 165/K/2011 RSM BUILDERS & SECURITIES P. LTD.. A.Y. 05-06 HONBLE CALCUTTA HIGH COURT), THE APPELLANT CLAIMED DEDUCTION IN A.Y. 2004-05 FOR RS.1,64,179/- & THE SAME WAS ALLOWED BY THE A.O. A. Y 2005-06 WHICH IS IN APPEAL IS THE FIFTH YEAR IN WHICH CLAIM FOR DEDUCTION WAS MAD E BUT NOT ALLOWED BY THE A.O. THE CIT(A) CONFIRMED THE ORDER OF THE A.O. 4. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE VIEW T HAT THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE IN THE LIGHT OF SECTION 35D AS C LAIMED BY THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OF FICER AS AGREED BY LD. DR. ACCORDINGLY, THIS ISSUE OF ASSESSEES APPEAL IS SET ASIDE AND ALLOWED FOR STATISTICAL PURPOSES. 5. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER ON APPL ICATION OF PROVISIONS OF SECTION 94(7) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE STATE D THAT CIT(A) AS WELL AS ASSESSING OFFICER HAS NOT EXAMINED THE SCHEME OF AMALGAMATION AND HE NARRATED THE FACTS AS UNDER: TOTAL LOSS OF RS.7,37,687/- IN M.F. PLEASE REFER T O CHART. (A) LOSS AGAINST M.F. AT SL. NO.1, 2 & 3 IS HIT BY PROVISION OF SEC. 94(7). (B) LOSS AT SL. NO. 4 IS NOT HIT BY SECTION 94(7) A S DATE OF DECLARATION OF DIVIDEND IS BEYOND 90 DAYS OF INVESTMENT. (C) LOSS IN M.F. AT SL. NO. 5, 6 & 7. THE LD. CIT( A) OBSERVED (REF. PAGE 11 OF THE APPEAL ORDER) THAT THE INVESTMENTS WERE MADE IN THE NAMES OF RSM TEA CO. LTD., DEEPLOK INVESTMENT & FINANCE CO . LTD., DEEPLOK PLANTATION LTD. FACTS ARE THAT THERE IS CHANGE IN NAME OF DEEPLOK PLANTATIONS LTD. TO DEEPLOK INVESTMENTS & FINANCE CO. LTD. BY ROC, WB & VIDE ORDER OF THE CALCUTTA HIGH COURT, RSM TEA CO. LTD. AND DEEP LOK INVESTMENTS & FINANCE CO. LTD. ARE AMALGAMATED WITH RSM BUILDE RS & SECURITIES LTD. (D) MF AT SL. NO. 8: THERE IS NO DIVIDEND INCOME AN D HENCE SEC. 94(7) IS NOT ATTRACTED. 6. WE AFTER HEARING BOTH THE SIDES, ARE OF THE VIEW THAT LET THE AO VERIFY THESE FACTS AND THEN DECIDE THE ISSUE AFRESH AFTER PROVID ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO HAS NOT EXAMIN ED THE SCHEME OF 3 ITA 165/K/2011 RSM BUILDERS & SECURITIES P. LTD.. A.Y. 05-06 AMALGAMATION. ACCORDINGLY, THIS ISSUE OF ASSESSEE S APPEAL IS SET ASIDE AND ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 19TH DAY OF APRIL, 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT RSM BUILDERS & SECURITIES PVT. LTD., C /O S. L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOL-1. 2 +,)* / RESPONDENT ACIT, CC-XIX, KOLKATA. 3 . -$ ( )/ THE CIT(A), KOLKATA 4. 5. -$ / CIT KOLKATA 4 <= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$>/ BY ORDER, 1 /ASSTT. REGISTRAR .