ZYDUS NYCOMED HEALTHCARE P.LTD, NAVI MUMBAI V. CIT 10, MUMBAI

ITA 2775/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75188 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: B V JHAVERI
• Keywords: Opportunity of being heard; Wholly owned subsidiary
• Section: 10B; 263

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL C CC C BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.2775/M/2013 2775/M/2013 2775/M/2013 2775/M/2013 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2007-08) M/S ZYDUS NYCOMED HEALTHCARE PVT. LTD., C-4, MIDC, VILLAGE PAWNE, TTC INDUSTRIAL AREA, THANE BELAPUR ROAD, VASHI, NAVI MUMBAI-400705 % % % % / VS. DCIT-10(3), AAYAKAR BHAVAN, M. K. ROAD, MUMABI-400020 #' ! ./ ( ./ PAN/GIR NO. :AAACZ0736D ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) $% $%$% $% ,- ,- ,- ,- . / . / . / . / /ASSESSEE BY : SHRI B. V. JHAVERI # # # # . / . / . / . / / REVENUE BY : SHRI A. C. TEJPAL % % % % . .. . -! -! -! -! / DATE OF HEARING : 7 TH JANUARY 2014 01& 01& 01& 01& . .. .-! -! -! -! /DATE OF PRONOUNCEMENT: 10 TH JANUARY 2014 ' 2 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E REVISION ORDER DATED 26.3.2013 OF CIT PASSED U/S 263 FOR THE ASSES SMENT YEAR 2007-08. 2. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 14 3(3) ON 22.12.2010. SUBSEQUENTLY, THE COMMISSIONER OF INCOM E TAX AFTER GOING THROUGH THE RECORD OBSERVED THAT THE ASSESSMENT ORD ER SUFFERED FROM ERROR IN ALLOWING THE DEDUCTION U/S 10B WITHOUT CON SIDERING THE PROVISIONS OF SECTION 10B(9) AND THEREFORE, THE ORDER PASSED B Y THE ASSESSING OFFICER WAS ERRONEOUS AND SO FAR AS THE PREJUDICIAL TO THE INTEREST OF REVENUE. ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 2 ACCORDINGLY, A SHOW-CAUSE NOTICE DATED 22.3.2012 U/ S 263 WAS ISSUED. AFTER CONSIDERING THE REPLY AND SUBMISSIONS OF THE ASSESSEE THE COMMISSIONER HELD THAT THE OWNERSHIP OR BENEFICIAL INTEREST IN THE ASSESSEE COMPANY WAS TRANSFERRED AND CONSEQUENTLY I N THE ASSESSMENT YEAR 2003-04 THE ORIGINAL PROMOTERS/SHAREHOLDERS OF THE COMPANY WERE NOT HOLDING 51% OF THE VOTING POWER WHICH IS IN VIO LENCE OF SUB-SECTION 9 OF SECTION 10B AS EXISTS AS RELEVANT POINT OF TIME FOR THE ASSESSMENT YEAR 2003-04. ACCORDINGLY, THE COMMISSIONER HELD THAT TH E ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 10B OF THE INCOME TAX ACT AND THE A.O WAS DIRECTED TO DISALLOW THE DEDUCTION U/S 10B AFTER GI VING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. BEFORE US THE LD. A.R OF THE ASSESSEE HAS SUBMIT TED THAT AN IDENTICAL ISSUE WAS INVOLVED FOR THE ASSESSMENT YEA R 2006-07 WHICH HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBU NAL VIDE ORDER DATED 26.6.2013 IN ITA NO. 2774/2013. THE LD. A.R HAS POI NTED OUT THAT THE ASSESSEE IS A JOINT VENTURE COMPANY BETWEEN BYK GUL DEN LAMBERG GMBH (THE NAME WAS SUBSEQUENTLY CHANGED TO ALTANA PHARMA AG W.E.F 1.7.2002) AND CADILA HEALTHCARE LTD. THE FOREIGN PA RTNER OF THE JOINT VENTURE AS WELL AS CADILA HEALTHCARE LTD. WERE HOLD ING 49.98% STAKE IN THE COMPANY AND THE REST SHARE HOLDING OF .04% WAS HELD BY THE TWO INDIVIDUALS NAMELY MR. PANKAJ R. PATEL AND MR. HEIN Z W. BULL. IN THE YEAR 2002 THE NON-RESIDENT PARTNER/SHAREHOLDER IN THE AS SESSEE COMPANY TRANSFERRED ITS ENTIRE SHARE HOLDING OF 49.98% TO I TS WHOLLY OWNED SUBSIDIARY BYK VERMOGENSVERWALTUNG GMBH IN THE MONT H OF NOVEMBER ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 3 2002. HOWEVER, IN THE MONTH OF FEBRUARY 2003 THE NO N-RESIDENT SHAREHOLDER NAMELY ALTANA PHARMA AG TOOK BACK 1.5% OF THE SHARE HOLDING (3 LACS SHARES) FROM ITS SUBSIDIARY. THUS, THE LD. A.R HAS SUBMITTED THAT AS ON 31.3.2013 SHARE HOLDING OF THE PROMOTERS / ORIGINAL SHAREHOLDERS WAS MORE THAN 51% AND THEREFORE, THERE IS NO VIOLEN CE OF SUB-SECTION 9 OF SECTION 10B. HE HAS RELIED UPON THE DECISION OF THI S TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07. ON THE OT HER HAND, THE LD. D.R HAS RELIED UPON THE IMPUGNED ORDER OF THE COMMI SSIONER AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE TRANSFER OF 1.5% OF THE ALLOTTED SHARES FROM SUBSIDIARY OF THE ALTANA P HARMA AG. HE HAS REFERRED THE RELEVANT PART OF THE IMPUGNED ORDER AN D SUBMITTED THAT THE RE-TRANSFER OF 1.5% OF THE SHARES OF THE ASSESSEE C OMPANY WAS NOT PROVED BY THE ASSESSEE AS NO INSTRUMENT WAS BROUGHT ON REC ORD TO SHOW THE SAID TRANSACTION. THE ASSESSEE HAS CLAIMED THE TRANSFER BY WAY OF RAISING A CREDIT NOTE DEPICTING THE PAYMENT. THUS, THE TRANSF ER OF 1.5% OF SHARES WAS NOT GENUINE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THE CONTROVERSY IS REV OLVING AROUND THE TRANSFER OF HOLDING OF NON-RESIDENT PARTNER OF THE ASSESSEE COMPANY TO ITS SUBSIDIARY AND THEREBY THE VOTING RIGHTS OF THE PRO MOTERS WAS REDUCED TO LESS THAN 51%. THOUGH SUB-SECTION 9 OF SECTION 10B HAS BEEN OMITTED BY THE FINANCE ACT 2003 W.E.F 1.4.2004 HOWEVER, AS PER THE PROVISIONS AS EXISTS AT THE RELEVANT TIME IF THE BENEFICIAL INTER EST IN THE UNDERTAKING IS TRANSFERRED BY ANY MEANS DURING ANY PREVIOUS YEAR T HE DEDUCTION U/S ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 4 10B(1) SHALL NOT BE ALLOWED TO THE ASSESSEE FOR THE ASSESSMENT YEAR RELEVANT TO SUCH PREVIOUS YEAR AND THE SUBSEQUENT Y EARS. THE ASSESSEE CLAIMED THAT TO WRINGLE OUT FROM THE PROVISIONS OF SECTION 10B(9) AND TO MAINTAIN THE SHARE HOLDING OF 51% BY THE ORIGINAL P ROMOTERS THE NON- RESIDENT PARTNER OF THE ASSESSEE, JOINT VENTURE TOO K BACK 1.5% OF THE SHARE HOLDING FORM ITS WHOLLY OWNED SUBSIDIARY IN T HE MONTH OF FEBRUARY 2003. THE COMMISSIONER HAS DOUBTED THE TRANSACTION OF THE TRANSFER OF 1.5% BY THE SUBSIDIARY TO THE ALTANA PHARMA AG ON T HE GROUND THAT THE ASSESSEE HAS NOT PRODUCED THE RELEVANT RECORD TO PR OVE THE SAME. THE CONCLUSIONING FINDING OF THE COMMISSIONER IS GIVEN IN PARA 8 & 9 AS UNDER: 8. FROM THE ABOVE DISCUSSIONS, IT CAN BE SUMMARIZE D THAT THE WHOLE EXERCISE OF SAID RETRANSFER OF SHARES WAS D ONE TO WRINGGLE OUT OF THE PROVISIONS OF SECTION 10B(9) IN A.Y. 200 3-04 SO THAT THE DEDUCTION OF CLAIM U/S 10B CAN BE ENJOYED BY THE AS SESSEE COMPANY. THIS IS ALL THE MORE CLEAR FROM THE SUBMIS SION MADE BY THE ASSESSEE COMPNAY THAT A CONSCIOUS DECISION WAS TAKEN BY WAY OF ABUNDANT CAUTION, TO MAINTAIN 51% OR MORE OF THE SAID SHAREHOLDING PATTERN AS IT PREVAILED EARLIER. RELI ANCE PLACED BY THE ASSESSEE COMPANY ON THE JUDGMENT OF HONOURABLE INCOME TAX APPELLATE TRIBUNAL, MUMBAI, G BENCH IN THE CA SE OF M/S WNS GLOBAL SERVICES PVT. LTD. IN ITA NO. 2566/M/200 9 ARE DIFFERENTIATED ON FACTS ON THE GROUND THAT THE SAID DECISION IS ON SECTION 10A AND THE INSTANT CASE IS ON SECTION 10B. SECONDLY, THE PROCEDURAL IMPROPRIETIES NOTICES IN THE INSTANT CAS E WERE NOT PRESENT IN THE SAID CASE BEFORE HONOURABLE ITAT. 9. IN VIEW OF THE ABOVE, THE ASSESSEE COMPANY WILL NOT BE ENTITLED TO DEDUCTION U/S 10B OF THE INCOME TAX ACT , 1961. HENCE, IT IS CLEAR THAT THE ASSESSING OFFICER HAS N OT APPLIED THE CORRECT LAW BY NOT INVOKING THE PROVISIONS OF SUBSE CTION (9) OF SECTION 10B OF THE INCOME TAX ACT, 1961. THEREFORE, THE ISSUE IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO D ISALLOW THE DEDUCTION U/S 10B OF THE INCOME TAX ACT, 1961 AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 5 5. IT IS APPARENT THAT THOUGH THE COMMISSIONER HAS DOUBTED THE TRANSACTION OF TRANSFER OF 1.5% OF THE SHARE BACK F ROM SUBSIDIARY TO THE NON-RESIDENT PARTNER OF THE ASSESSEE COMPANY HOWEVE R, NO SPECIFIC FINDING HAS BEEN GIVEN THAT THE SAID TRANSACTION OF TRANSFER OF 3,00,000 SHARES BY THE SUBSIDIARY TO THE ALTANA PHARMA AG IS BOGUS. WE FURTHER NOTED THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED A ND DECIDED BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2006-07 IN PARA 6 AS UNDER: 6. BEFORE PROCEEDING FURTHER LET US EXAMINE THE SH ARE PATTERN AT THE END OF EACH FINANCIAL YEAR FROM THE INCEPTION I.E. 31.03.2000 TO 31.03.2003:- PERCENTAGE OF SHAREHOLDING NAME OF THE SHAREHOLDER AS ON 31-03- 2000 AS ON 31-03- 2001 AS ON 31-03- 2002 AS ON 31-03- 2003 BYK GULDEN LOMBERG CHEMISCHE FABRIK GMBH (NAME CHANGED TO ALTANA PHARMA AG, WITH EFFECT FROM 01-07-2002 49.9800% 49.9995% 49.9995% 1.5000% CADILA HEALTHCARE LIMITED 49.9800% 49.9995% 49.9995% 49.9995% MR. PANKAR R.PATEL 0.0200% 0.0005% 0.0005% 0.0005% SUB-TOTAL 99.9800% 99.9995% 99.9995% 51.5000% MR. HEINZ W.BULL (SUCCEEDED BY MR. HANZ JOACHIM LOHRISCH WITH EFFECT FROM 14-08-2000) 0.0200% 0.0005% 0.0005% 0.0005% BYK VERMOGENSVERWALTUNG GMBH (WITH EFFECT FROM 30-11-2002) 0.0000% 0.0000% 0.0000% 48.4995% GRAND-TOTAL 100% 100% 100% 100% THE FACTS ON RECORD SHOW THAT SINCE INCEPTION, THE NON-RESIDENT SHARE HOLDER IN THE ASSESSEE COMPANY WAS BYK GULDEN LOMBERG CHEMISCHE FABRIC GMBH W.E.F. 01.07.2002. THE SAID COMPANY CHANGED ITS NAME TO ALTANA PHARMA AG. AFTER THE CH ANGE IN NAME THE SAID COMPANY DECIDED TO TRANSFER THE SHARE HOLDING TO ITS 100% SUBSIDIARY BYK GULDEN LOMBERG CHEMISCHE FA BRIC GMBH. HOWEVER, FOR ALL PRACTICAL PURPOSES ALTANA P HARMA AG CONTINUED TO HOLD THE OWNERSHIP AND BENEFICIAL INTE REST AND EXERCISING THE VOTING POWER IN ASSESSEE COMPANY THR OUGH ITS 100% SUBSIDIARY. FACTS ON RECORD SHOW THAT SOON AF TER THE TRANSFER OF ITS SHARE HOLDING TO ITS SUBSIDIARY W.E .F. 30.11.2002, IT ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 6 WAS ADVISED TO ALTANA PHARMA AG THAT IF IT COMES TO BE INTERPRETED THAT THERE WAS A CHANGE OF MORE THAN 51 % OF THE SHARE HOLDING ASSESSEE COMPANY, ON ACCOUNT OF THE A FORESAID TRANSFER, IT COULD GIVE RISE TO CONTENTIOUS ISSUES AND DEPRIVE THE ASSESSEE COMPANY OF THE BENEFIT OF ITS CLAIM U/S. 1 0B OF THE ACT. ACCORDINGLY, TO MAINTAIN 51% OR MORE OF THE SAME SH ARE HOLDING PATTERN AS IT PREVAILED EARLIER, THE REQUEST FOR SP LITTING UP AND SUBSEQUENT TRANSFER OF 3,00,000 SHARE WAS EXECUTED IN FEBRUARY 2003. THIS IS ALSO EXHIBITED CLEARLY IN SHARE HOLD ING PATTERN MENTIONED HEREIN ABOVE. IT IS THIS RE-TRANSFER OF SHARES AND SPLITTING THAT HAS BEEN QUESTIONED BY THE ASSESSING OFFICER. AT THIS STAGE IT WOULD BE PERTINENT TO CONSIDER THE RE MAND REPORT DATED 29.06.2010 SUBMITTED BY THE ASSESSING OFFICER TO THE CIT(A). THE TEXT OF THE REPORT IS AS UNDER : MY PREDECESSOR MR. C.J.VINCENT HAD ADDRESSES A LET TER DATED 03.05.2010 BY EMAIL TO THE ASSESSEE IN RESPON SE TO WHICH THE ASSESSEE HAS FURNISHED THE FOLLOWING DOCUMENTS FOR VERIFICATION ALONGWITH ITS LETTER DAT ED 12.05.2010. 1. DETAILS OF FLOW OF FUND FOR TRANSFER OF SHARES BETW EEN THE BYK VERMOGENSVER WALTUNG GMBH & ALTANA PHARMA 2. ORIGINAL MINUTES OF BOARD MEETINGS OF THE ASSESSEE COMPANY REFLECTING THE BOARD RESOLUTION DATED 13.03 .2003. 3. COPIES OF RBI APPROVAL FOR ISSUE OF SHARES TO ALTAN A PHARMA 4. ORIGINAL ACKNOWLEDGED COPY OF FORWARDING LETTER DAT ED 20.03.2003, IN RESPECT OF 2 ND INTERIM DIVIDEND PAID DURING F.Y. 2002-03. 5. COPY OF RCD 2 IN RESPECT OF THE 1 ST INTERIM DIVIDEND PAID BY THE ASSESSEE COMPANY DURING F.Y. 2002-03. 6. COPY OF THE ANNUAL RETURN AS PER THE COMPANIES ACT, 1956, FILLED BY THE ASSESSEE COMPANY WITH THE REGISTRAR O F COMPANIES (ROC), DURING F.Y. 2003-04. 7. COPY OF STATEMENT OF BANK ACCOUNT NO. 270818800 OF ALTANA PHARMA REFLECTING THE AMOUNT OF DIVIDEND REC EIVED BY ALTANA PHARMA AG. 8. THE ORIGINAL SHARE TRANSFER FORM DATED 05.02.2003. ON VERIFICATION, ALL THE ABOVE DOCUMENTS ARE FOUND TO BE IN ACCORDANCE WITH THE DUE COMPLIANCE OF THE PROCEDURE IN RESPECT OF THE CHANGE IN SHAREHOLDING WHICH HAD TAK EN PLACE BEFORE MARCH 2003. ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 7 A PERUSAL OF THIS REMAND REPORT CLEARLY ESTABLISHES THAT THE SHARE HAS BEEN TRANSFERRED BEFORE MARCH 2003, INTERIM DIV IDEND HAS BEEN RECEIVED BY THE TRANSFEREE WHICH HAS ALSO BEEN VERIFIED FROM THE BANK STATEMENTS OF ALTANA PHARMA AG. AS T HE ASSESSING OFFICER HIMSELF HAS VERIFIED SUCH CLINCHI NG EVIDENCES AND HAS ACCEPTED THEM IN ORDER, THEREFORE, IN OUR C ONSIDERATE VIEW WE DO NOT FIND ANY REASON TO HOLD THAT THERE W AS A CHANGE IN OWNERSHIP TO THE DETRIMENT OF THE ASSESSEE COMPA NY VIS-A-VIS SECTION 10B(9) OF THE ACT. CONSIDERING ALL THE FAC TS RELATING TO TRANSFER AND THE REMAND REPORT, WE HOLD THAT THE SU BSTANTIAL SHARE HOLDING WAS ALWAYS WITH THE ASSESSEE AT THE E ND OF THE FINANCIAL YEAR ENTITLING IT FOR THE CLAIM OF EXEMPT ION U/S. 10B(9) OF THE ACT. THE FINDINGS OF THE CIT(A) ARE REVERSED O N THIS ACCOUNT. WE, FURTHER FIND THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF WNS GLOBAL SERVICES PVT. LTD. (SUPRA), SQUARELY APP LY ON THE FACTS OF THE CASE. AFTER CONSIDERING THE JUDGMENTS OF THE CONSTITUTIONAL BENCH IN (I) RAYALA CORPORATION PVT. LTD. AND M.R.PRATAP VS. DIRECTOR OF ENFORCEMENT, NEW DELHI R EPORTED AS 1969 (2) SCC 412 AND AGAIN IN (II) KOLHHAPUR CANE S UGAR WORKS LTD. VS. UNION OF INDIA, REPORTED AS [2002] 2 SCC 5 36, THE TRIBUNAL AT PARA 16 OF ITS ORDER HELD AS UNDER: 16. FROM THE ABOVE PROPOSITION OF LAW, IT IS CLEAR THAT IF A PROVISION IN A STATUTE IS UNCONDITIONALLY OMITTED WITHOUT ANY SAVING CLAUSE IN FAVOUR OF THE PENDING PROCEEDINGS, ALL ACTIONS MUST STOP WHERE SUCH AN OMISSION IS FOUND. THUS, ONCE THE PROVISIONS OF SU B- SECTION 9 HAVE BEEN OMITTED, THEN IT CAN BE SAFELY INFERRED THAT SUCH AN OMISSION WILL BE APPLICABLE WHEREVER OMITTED SECTION COMES INTO PLAY. THE BANGALORE BENCH OF THE TRIBUNAL IN M/S. G.E.THERMO MATRIX INDIA P. LTD. (SUPRA), AFTER RELYING ON THE AFORESAID JUDGMENT OF CONSTITUTIONAL BENCH OF THE HONBLE SUPREME COURT, HAS HELD THAT SUB-SECTION 9 OF SECTION 10B (WHICH IS SIMILAR TO SECTION 10A), HELD THAT PROVISIONS OF SECTION 10B SHOULD BE READ AS THOUGH IT NEVER HAD SUB-SECTION 9 IN ALL THE PROCEEDINGS UNDE R THE ACT. 17. THEREFORE, IN OUR CONSIDERED OPINION, SUB- SECTION 9 TO SECTION 10A, WHICH HAS BEEN OMITTED FR OM THE STATUTE W.E.F. 1 ST APRIL 2004, HAS TO BE READ TO BE OBLITERATED FROM THE STATUTE BOOK OR AT LEAST IT WI LL NOT HAVE ANY EFFECT FROM THE YEAR IN WHICH IT WAS OMITT ED. THUS, EVEN IF THERE WAS ANY CHANGE IN THE OWNERSHIP THROUGH ACQUISITION OF SHARES IN EARLIER YEAR 2003- 04, EXEMPTION UNDER SECTION 10A, CANNOT BE DENIED ON TH IS GROUND IN THE ASSESSMENT YEAR 2004-05. TO THIS EXT ENT, THE CONTENTIONS OF THE LEARNED SR. ADVOCATE ARE ITA NO.2775/M/2013 ZYDUS NYCOMED HEALTHCARE PVT. LTD. 8 ACCEPTED. ON THE AFORESAID CONCLUSION, WE HOLD THA T THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, WHICH HAS BEEN SOUGHT TO BE CANCELLED UNDER SECTION 263 IS NOT ERRONEOUS IN LAW. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL , WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION TO THE ASSESSE E U/S. 10B OF THE ACT AS CLAIMED. 6. THE TRIBUNAL HAS GIVEN THE FINDING OF FACT BY HO LDING THAT THERE WAS A TRANSFER OF 1.5% (3 LACS SHARES) OF THE ASSESSEE COMPANY IN FAVOUR OF ALTANA PHARMA AG BY WHOLLY OWNED SUBSIDIARY AND THE REFORE, THE ORIGINAL SHAREHOLDERS MAINTAINED 51% SHAREHOLDING PATTERN AS ON 31.3.2003. IN VIEW OF THE FINDING OF THIS TRIBUNAL ON THIS ISSUE WE SET ASIDE THE IMPUGNED ORDER OF THE COMMISSIONER. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JANUARY 2014 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 10 TH JANUARY 2014 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI