Adani Retail Ltd, Ahmedabad V. The ACIT., Circle-1, Ahmedabad

ITA 2177/AHD/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8006 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-08-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 01-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Business income; Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] I.T.A. NO.2177/AHD/2011 ASSESSMENT YEAR : 2008-09 ADANI RETAIL LTD .....APPELLANT [ERSTWHILE KNOWN AS B2C INDIA LTD] ADANI HOUSE, NR. MITHAKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD [PAN : AABCB 5212 H] VS. ACIT .RESPONDENT CIRCLE-1, AHMEDABAD APPEARANCES BY: SN SOPARKAR FOR THE APPELLANT SONIA KUMAR FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 05.12.2017 DATE OF PRONOUNCING THE ORDER : 13.12.2017 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 3 RD AUGUST 2011, PASSED BY THE LEARNED CIT(A)-VI, AHMEDABAD, IN THE MATTER OF ASSE SSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2008- 09. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN NOT UPHOLDING THE ASSESSEES PLEA THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 28.12.2010 WAS BAD IN LAW AND DESERVED TO BE QUASHED. 2. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE CIT(A) ERRED IN NOT ACCEPTING THE ASSESSEES CLAIM FOR DEDUCTION OF RS.4,83,48,034/- FOR ASSESSEES SHARE OF BROUGHT FO RWARD DEFICIENCIES, OUT OF TOTAL DEFICIENCIES OF RS.37.22 CRORES (BROUGHT F ORWARD LOSS RS.22.64 CRORES) WHICH STOOD AS PER RECORD BEFORE THE DEMERG ER. ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 2 OF 6 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN UPHOLDING THE ASSESSING OFFICERS VIEW THAT FOR BIF URCATION OF THOSE DEFICIENCIES THE CASE WOULD BE GOVERNED BY SECTION 72A(40(B) AND HE FURTHER ERRED IN NOT UPHOLDING THE ASSESSEES CLAIM THAT THIS CASE WAS COVERED BY SECTION 72A(4)(A). 3. THE ISSUE IN APPEAL LIES IN A NARROW COMPASS OF MATERIAL FACTS. IT IS A CASE OF DEMERGER, UNDER THE SCHEME APPROVED BY HONBLE GUJA RAT HIGH COURT VIDE ORDER DATED 13.06.2007, AND THE SHORT DISPUTE BEFORE US IS WITH RESPECT OF BIFURCATION OF BROUGHT FORWARD DEFICIENCIES, I.E. UNABSORBED LOSSES AND DE PRECIATION, FOR COMPUTING THE SAME IN THE HANDS OF THE ASSESSEE BEFORE US, I.E. DEMERG ED COMPANY. UNDER THE SCHEME OF DEMERGER, THE DEMERGED COMPANY (I.E. THE ASSESSEE) WAS LEFT WITH THE ASSETS WORTH RS.17,12,758/-, WHEREAS THE RESULTING COMPANY (I.E. ADVANTAGE RETAIL PVT LTD) WAS TRANSFERRED THE ASSETS WORTH RS.108,53,15,071/-. I T WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT THE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION WAS REQUIRED TO BE BIFURCATED BETWEEN THE DEMERGED COMPANY AND THE RESULTING COMPANY, IN THE SAME RATIO WHICH WORKS OUT TO 3:2000. THE ASSESSING OFFICER RELIED UPON THE PROVISIONS OF SECTION 72A(4 )(B) IN SUPPORT OF THE APPROACH SO ADOPTED. AS REGARDS ASSESSEES CONTENTION THAT SEC TION 72A(4)(A) APPLIES TO THE FACTS OF THIS CASE, AND THE COMPUTATION OF BIFURCATION ON THAT BASIS, THE ASSESSING OFFICER REJECTED THE SAME AND REASONED AS FOLLOWS:- 2.14 THE CONTENTIONS OF THE ASSESSEE-COMPANY HAVE BEEN PERUSED. THE ASSESSEE-COMPANY HAS NOT DISPUTED THE FACT THAT THE BROUGHT-FORWARD LOSSES AND UNABSORBED DEPRECIATION HAVE BEEN WRONGLY CLAIMED B Y IT. MOREOVER, ANY OTHER FACT AS NOTED IN THE DETAILED SHOW-CAUSE NOTICE, IS SUED TO THE ASSESSEE-COMPANY ON 10.12.2010, HAS NOT BEEN DISPUTED, EXCEPT ONE. T HE ONLY CONTENTION RAISED BY THE ASSESSEE-COMPANY IS THAT IT IS ELIGIBLE FOR UNA BSORBED DEPRECIATION AND LOSSES AGGREGATING TO RS.4,83,48,034/- ON ACCOUNT O F ITS BUSINESS TO BUSINESS (B2B) OPERATIONS THAT HAVE CONTINUED WITH THE DEMER GED COMPANY (ASSESSEE- COMPANY). THE ASSESSEE-COMPANY HAS SUBMITTED THAT T HE SAID LOSSES ARE DIRECTLY RELATABLE TO THE DEMERGED COMPANY, THUS, T HE SAME ARE ALLOWABLE AS PER THE PROVISIONS OF 72A(4)(A) OF THE ACT. THE ASSESSE E-COMPANY IN SUPPORT OF ITS CLAIM HAS PREPARED A 'WORKING OF BIFURCATION OF PRO FIT & LOSS BETWEEN B2B & B2C' WHEREIN IT HAS APPORTIONED THE TOTAL EXPENSES INCUR RED BY THE ASSESSEE-COMPANY BETWEEN THE RETAIL BUSINESS (B2C) AND THE WHOLESALE BUSINESS (B2B). FURTHER, BASED ON THIS' WORKING OF PROFITS AND LOSSES, CONSE QUENT TO THE SHOW-CAUSE NOTICE, THE ASSESSEE-COMPANY HAS PROVIDED A YEAR-WI SE WORKING OF THE LOSSES AND UNABSORBED DEPRECIATION AND HAS CLAIMED THAT LO SSES AND UNABSORBED DEPRECIATION AGGREGATING TO RS.4,83,48,034/- ARE DI RECTLY RELATABLE TO THE B2B BUSINESS OF THE ASSESSEE-COMPANY (DEMERGED-COMPANY) . IT IS NOTEWORTHY THAT THE ASSESSEE COMPANY HAS NOT SUBMITTED SEPARATE PRO FIT & LOSS ACCOUNTS FOR THE TWO UNDERTAKINGS BUT 'A WORKING OF BIFURCATION OF P ROFIT & LOSS'. 2.15 THE CONTENTIONS OF THE ASSESSEE-COMPANY ARE HI GHLY MISPLACED AND LACK ANY SUBSTANCE AND MERIT AND ARE THUS, REJECTED FOR THE REASONS DISCUSSED IN THE FOLLOWING PARAGRAPHS: ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 3 OF 6 2.16 IT IS A FACT, ACCEPTED BY THE ASSESSEE-COMPANY AS WELL, THAT INSPITE OF TRANSFER OF ALL THE ASSETS AGGREGATING TO RS. 108.7 0 CRORES EXCEPT AN ASSET OF RS.0.17 CRORES IT HAS CLAIMED THE ENTIRE UNABSORBED DEPRECATION AND BROUGHT FORWARD LOSSES AGGREGATING TO RS. 37.22 CRORES IN I TS RETURN OF INCOME. MOREOVER, THE ASSESSEE-COMPANY HAS SET-OFF THE CURRENT YEAR'S BUSINESS INCOME AMOUNTING TO RS.1,99,21,607/- AGAINST THESE BROUGHT FORWARD L OSSES. WHEREAS, THE ASSESSEE-COMPANY WAS REQUIRED TO CARRY FORWARD THE LOSSES CONSEQUENT TO THE DEMERGER AS PER THE PROVISIONS OF SECTION 72A(4)(B) OF THE ACT. THE ASSESSEE- COMPANY IN VIOLATION OF THE PROVISIONS AS CLEARLY L AID DOWN IN THE ACT HAS CLAIMED THE ENTIIC LOSSES IN THE DEMERGED COMPANY. 2.17 THE ASSESSEE-COMPANY HAS NOT MAINTAINED SEPARA TE ACCOUNTS FOR THE TWO DIVISIONS VIZ. B2B & B2C. THIS FACT IS CLEAR FROM T HE FACT THAT THE ASSESSEE- COMPANY HAS NOT SUBMITTED SEPARATE ACCOUNT FOR THE TWO UNDERTAKINGS BUT, A 'WORKING OF BIFURCATION. FURTHER, ON EXAMINATION O F THE RECORDS OF THE ASSESSEE- COMPANY AVAILABLE WITH THIS OFFICE FOR THE EARLIER YEARS IT IS DEAR THAT IT HAS NEITHER MAINTAINED SEPARATE ACCOUNTS FOR THE TWO DIVISIONS NOR HAS COMPUTED LOSSES AND DEPRECIATION SEPARATELY AS PER THE PROVISIONS OF TH E ACT. 2.18 THE WORKING PROVIDED BY THE ASSESSEE-COMPANY C ONSEQUENT TO THE SHOW- CAUSE NOTICE IS AN AFTERTHOUGHT, ARBITRARY AND HAS BEEN DONE SO AS TO PREVENT THE INCIDENCE OF ANY TAX LIABILITY THAT THE ASSESSEE-CO MPANY WOULD BE LIABLE TO PAY .CONSEQUENT TO THE COMPUTATION OF THE BROUGHT FORWA RD LOSSES AND UNABSORBED DEPRECIATION AS PER THE PROVISIONS OF SECTION 72A(4 ) OF THE ACT. 2.19 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE- COMPANY HAS NEITHER MAINTAINED/SEPARATE BOOKS OF ACCOUNT FOR THE TWO DI VISIONS, NOR SUCH WORKING WAS CARRIED OUT AT THE TIME OF DEMERGER. HAD SUCH W ORKING BEEN CARRIED OUT THE ASSESSEE-COMPANY WOULD HAVE CLAIMED THE ELIGIBLE LO SSES AND UNABSORBED DEPRECIATION, AGAINST THE COMPLETE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION AS CLAIMED BY THE ASSESSEE-COMPANY IN ITS RETURN OF INCOME. SUBMITTING OF SUCH WORKING WHEREIN IT HAS BEEN CLAI MED THAT CERTAIN LOSSES ARE DIRECTLY RELATABLE TO THE DEMERGED UNDERTAKING, CON SEQUENT TO SHOWCAUSE, DESERVES TO BE DISCARDED AS IT IS DEVOID OF ANY MER IT AND IS A MERE AFTERTHOUGHT SO AS TO PREVENT THE TAXABILITY OF THE INCOME OF RS . 199 CRORES WHICH HAS BEEN SET-OFF BY THE ASSESSEE-COMPANY AGAINST THE WRONGLY BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION. 2.20 MOREOVER, THE ASSESSEE-COMPANY HAS NOT EXPLAIN ED THE BASIS FOR THE APPORTIONMENT OF THE EXPENSES BETWEEN THE B2B AND B 2C BUSINESS OPERATIONS. HOWEVER, THE ASSESSEE-COMPANY VIDE LETTER DATED 24. 12.2010 HAS SUBMITTED A CERTIFIED COPY OF THE SAME 'WORKING OF BIFURCATION OF PROFIT AND LOSSES BETWEEN B2C & B2B CERTIFIED BY A PRACTICING CHARTERED ACCOU NTANT. THE SAME CANNOT BE OF ANY HELP TO THE ASSESSEE-COMPANY AS IT IS A FACT THAT THE ASSESSEE-COMPANY HAS NOT MAINTAINED SEPARATE ACCOUNTS FOR THE TWO UN DERTAKINGS. MOREOVER, THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF GOODYEAR INDIA LTD. VS: CIT 112 TAXMAN 419 HAS HELD THAT: ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 4 OF 6 'MERELY BECAUSE AN AUDIT REPORT IS AVAILABLE THERE IS NO FETTER ON THE POWER OF THE ITO TO REQUIRE ME ASSESSEE TO JUSTIFY ITS CL AIM WITH REFERENCE TO RECORDS, MATERIALS AND EVIDENCE. SUCH A POWER IS IN HERENT IN AN ASSESSING OFFICER IN THE SCHEME OF THE ACT' 2.21 AS THE ASSESSEE IN THE PRESENT CASE HAS FAILED TO PROVE THAT SEPARATE ACCOUNTS HAVE BEEN MAINTAINED BY IT FOR THE TWO UND ERTAKINGS, NO LOSSES CAN BE SAID TO BE DIRECTLY RELATABLE TO THE B2B BUSINESS R ETAINED BY THE ASSESSEE- COMPANY. 2.22 IN LIGHT OF THE FACTS THAT THE ASSESSEE-COMPAN Y HAS NOT MAINTAINED SEPARATE ACCOUNTS FOR THE DEMERGED UNDERTAKING AND THE RESUL TING UNDERTAKING ON A YEAR TO BASIS AND THE CLAIM OF THE ASSESSEE-COMPANY THAT CERTAIN LOSSES AND DEPRECIATION IS DIRECTLY RELATABLE TO THE DEMERGED COMPANY IS AN AFTERTHOUGHT DEVOID OF ANY BASIS AND MERIT, THE PROVISIONS OF CL AUSE (A) OF SUB SECTION 4 OF SECTION 72A OF THE ACT DOES NOT APPLY IN THE PRESEN T CASE. 2.23 AS PER THE DISCUSSION HELD ABOVE, NO BROUGHT F ORWARD LOSS AND UNABSORBED DEPRECIATION IS DIRECTLY RELATABLE TO THE UNDERTAKI NG TRANSFERRED AND THE RESULTING COMPANY. THUS, THE PROVISIONS OF CLAUSE (B) OF SUB SECTION 4 OF SECTION 72A OF THE ACT ARE SQUARELY APPLICABLE IN THE PRESENT CASE . 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) APPROVED AND JUSTIFIED THE APPROACH OF THE ASSESSING OFFICER, AND OBSERVED AS FOLLOWS:- 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSES SMENT ORDER AND APPELLANT'S SUBMISSION. THE UNDISPUTED FACTS ARE- SUBSTANTIAL B USINESS OF THE APPELLANT IS DEMERGED IN A SEPARATE ENTITY AND BEFORE DEMERGER, SEPARATE ACCOUNTS OR EVEN FINAL ACCOUNTS IN RESPECT OF DEMERGED AND REMAINING BUSINESS WERE NOT PREPARED AT ANY TIME IN THE PAST. SINCE APPELLANT HAD BROUGH T FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION, PROVISIONS OF SECTION 72A( 4) IS APPLICABLE TO THE APPELLANT COMPANY AS WELL AS THE RESULTING COMPANY. CLAUSE (A) OF THIS SUBSECTION IS APPLICABLE WHERE SUCH LOSSES OR DEPRE CIATION IS DIRECTLY RELATABLE TO THE UNDERTAKINGS TRANSFERRED TO THE RESULTING COMPA NY AND IN OTHER CASES WHERE SUCH LOSSES OR DEPRECIATION IS NOT DIRECTLY RELATAB LE TO THE UNDERTAKING TRANSFERRED, CLAUSE (B) IS APPLICABLE. THE DISPUTE IN THIS CASE IS WHETHER CLAUSE (A) IS APPLICABLE IN THE APPELLANT'S CASE OR CLAUSE (B) IS APPLICABLE. APPELLANT CLAIMED THAT CLAUSE (A) IS APPLICABLE SINCE IT BIFU RCATED INCOME AND EXPENSES FOR ALL THE YEARS AND WORKED OUT LOSSES AND DEPRECIATIO N. ASSESSING OFFICER HELD THAT CLAUSE (B) APPLIES SINCE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION IS NOT DIRECTLY RELATABLE TO UNDERTAKING TRANSFERRED. IN THE ABSENCE OF SEPARATE ACCOUNTS OR AT LEAST FINAL ACCOUNTS OF EXISTING AND TRANSFERRED UNDERTAKINGS FOR PAST MANY YEARS SINCE BEGINNING, THE LOSS OR DEPREC IATION CANNOT BE DIRECTLY RELATED TO THE TRANSFERRED UNDERTAKING. THE APPELLA NT'S EFFORT IN BIFURCATING EXPENSES IS WITHOUT ANY BASIS. THE SAME IS NOT AUDI TED OR AUTHENTICATED. THE ALLOCATION OF EXPENSES FOR PAST SEVERAL YEARS AT TH IS STAGE IS NOT POSSIBLE AND CANNOT BE VERIFIED. SINCE APPELLANT HAD NOT PREPARE D DIVISION WISE FINAL ACCOUNTS ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 5 OF 6 INCLUDING P&L ACCOUNT FOR ALL THE YEARS FROM WHERE UNABSORBED DEPRECIATION OR BROUGHT FORWARD BUSINESS LOSSES RELATES TO, SUCH BI FURCATIONS OF EXPENSES AND WORKING OUT OF LOSSES AND DEPRECIATION IS NOT GENER ATED FROM THE RECORDS AVAILABLE WITH THE DEPARTMENT. NEEDLESS TO MENTION THAT BOTH BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION ARE DETER MINED BY THE ASSESSING OFFICER AFTER ASSESSMENT AND IT IS NOT JUST WHAT IS SUBMITTED BY THE APPELLANT. IN THE PRESENT CASE APPELLANT HAS NOT EVEN PREPARED SE PARATE P&L ACCOUNTS COMPUTING SEPARATE LOSSES OR UNABSORBED DEPRECIATIO N. NONE OF THESE ASSESSMENTS ARE OPEN AT THIS STAGE IN WHICH THE DET AILS NOW SUBMITTED BY THE APPELLANT CAN BE EXAMINED AND VERIFIED. THEREFORE T HE CLAIM OF THE APPELLANT THAT THE LOSS OR DEPRECIATION IS DIRECTLY RELATABLE TO T HE UNDERTAKING TRANSFERRED IS WITHOUT ANY BASIS AND CANNOT BE ACCEPTED. IN THE ABSENCE OF LOSSES OR DEPRECIATION NOT DIRECT LY RELATABLE TO THE UNDERTAKING TRANSFERRED, THE SAME IS TO BE APPORTIO NED IN THE RATIO OF ASSETS OF THE TWO UNDERTAKINGS. ASSESSING OFFICER HAS DONE TH E SAME AND THERE IS NO DISPUTE AS FAR AS APPORTIONMENT OF UNABSORBED DEPRE CIATION AND BROUGHT FOR BUSINESS LOSSES IN CLAUSE (B) IS CONCERNED. IN VIEW OF THE FACTS MENTIONED IN THE ASSESSMENT ORDER AND DISCUSSION IN PRECEDING PARA, I UPHOLD THE VIEW TAKEN BY THE ASSESSING OFFICER AND DISMISS THESE GROUNDS AS NOT SUSTAINABLE. 5. THE ASSESSEE IS NOT SATISFIED, AND IS IN FURTH ER APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 7. SECTION 72A(4), WHICH PROVIDES FOR THE LEGAL BAS IS FOR BIFURCATION OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION, PROVIDE S AS FOLLOWS:- 72A (4) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, IN THE CASE OF A DEMERGER, THE ACCUMULATED LOSS AND THE AL LOWANCE FOR UNABSORBED DEPRECIATION OF THE DEMERGED COMPANY SHALL (A) WHERE SUCH LOSS OR UNABSORBED DEPRECIATION IS DIRECTLY RELATABLE TO THE UNDERTAKINGS TRANSFERRED TO THE RESULTING COMPANY, BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN THE HANDS OF THE RESULTING C OMPANY; (B) WHERE SUCH LOSS OR UNABSORBED DEPRECIATION IS NOT DIRECTLY RELATABLE TO THE UNDERTAKINGS TRANSFERRED TO THE RESULTING COMPANY, BE APPORTIONED BETWEEN THE DEMERGED COMPANY AND THE RESULTING COMPANY IN T HE SAME PROPORTION IN WHICH THE ASSETS OF THE UNDERTAKINGS HAVE BEEN R ETAINED BY THE DEMERGED COMPANY AND TRANSFERRED TO THE RESULTING C OMPANY, AND BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN THE HA NDS OF THE DEMERGED COMPANY OR THE RESULTING COMPANY, AS THE CASE MAY B E. 8. CLEARLY, THEREFORE, AS LONG AS BROUGHT FORWARD L OSSES AND UNABSORBED DEPRECIATION CAN BE DIRECTLY RELATABLE TO THE UNDER TAKINGS TRANSFERRED TO THE RESULTING COMPANY (I.E. ADVANTAGE RETAIL PVT LTD) IN THIS CAS E, THE SAME IS TO BE CARRIED FORWARD ITA NO. 2177/AHD/2011 ADANI RETAIL LTD VS ACIT A.Y. 2008-2009 PAGE 6 OF 6 IN THE HANDS OF RESULTING COMPANY. WHAT IT ESSENTI ALLY REQUIRES IS THAT THE EXPLANATION OF THE ASSESSEE, ON HOW IS IT DIRECTLY RELATABLE TO TH E UNITS TRANSFERRED TO RESULTING COMPANY, IS TO BE EXAMINED ON MERITS AND, IF NO DEF ECTS ARE FOUND IN THE SAME, IT IS TO BE ACCEPTED. THESE EXPLANATIONS CANNOT BE BRUSHED ASIDE ON THE GROUND THAT SEPARATE BOOKS OF ACCOUNTS ARE NOT MAINTAINED, WHICH IS NOT A CONDITION PRECEDENT FOR INVOKING SECTION 72A(4)(A) ANYWAY, OR THAT THESE EXPLANATION S WERE NOT FURNISHED AT THE TIME OF DEMERGER. NOR, FOR THAT PURPOSE, REJECTION OF THE EXPLANATION ON THE BASIS OF SWEEPING GENERALIZATIONS OR VAGUE REASONS CAN MEET OUR APPRO VAL EITHER. THE APPROACH ADOPTED BY THE AUTHORITIES BELOW, THUS, DOES NOT MEET OUR A PPROVAL. 9. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARIN G IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER IS REQUI RED TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO IN THE L IGHT OF OUR OBSERVATIONS ABOVE, IN ACCORDANCE WITH THE LAW, BY WAY OF A SPEAKING ORDER DEALING WITH SPECIFIC JUSTIFICATIONS FOR BIFURCATION, AS MAY BE GIVEN BY THE ASSESSEE, A FTER GIVING A FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER, 2017. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 13 TH DAY OF DECEMBER, 2017 **BT* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF TAKING DICTATION: .. .4 PAGE MANUSCRIPTS OF HONBLE AM ARE ATTACHED ...11.12.2017.. 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE DI CTATING MEMBER: ... 11.12.2017.................... ..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: ...13.12.2017..... 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: ... . 13.12.20 17. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . ...... 13.12.2017................ 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGISTR AR FOR SIGNATURE ON THE ORDER: .................. ....... 8. DATE OF DESPATCH OF THE ORDER: ................. ........