GAURER & WEIL (iNDIA) LTD, MUMBAI V. ACIT 9(1), MUMBAI

ITA 384/MUM/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 3796 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: NITESH JOSHI SHRI VIPUL MODI
• Keywords: Reopening of assessment; Scheme of amalgamation; Assessment record; Tax effect; Set aside
• Section: 43B; 143(3); 142(1); 143(2); 13; 147; 148

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN , AM & SHRI RAM LAL NEGI, JM ./ I.T.A. NO . 384 / MUM/ 2017 ( / ASSESSMENT YEAR: 2008 - 09 ) M/S GRAUER & WEIL (I) LTD. (SUCCESSOR TO BOMBAY PAINTS LTD.) GROWEL HOUSE, AKURLI ROAD, KANDIVALI (E), MUMBAI 400 101 / VS. ACIT RANGE - 12(2 )(2), (ERSTWHILE ACIT CIRCLE 9(1), MUMBAI) 145, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. AA ACG 3741 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI NITESH JOSHI / SHRI VIPUL MODI , AR / RESPONDENTBY : SHRI V. VINOD KUMAR, DR / DATE OF HEARING : 14.10 .201 9 / DATE OF PRONOUNCEMENT : 30.10.2019 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 20 IN 2 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 28.09.16 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2008 - 09 . 2 . T HE BRIEF FACTS OF THE C ASE ARE THAT THE PRESENT ASSESSEE I.E. M/S GRAUER & WEIL (I) LTD, WHICH IS SUCCESSOR OF BOMBAY PAINTS LTD AND THE ERSTWHILE COMPANY BOMBAY PAINTS LTD FILED ITS RETURN OF INCOME ON 29.09.2008 DECLARING TOTAL INCOME AT RS. NIL. ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 01.12.10 DETERMINING THE TOTAL INCOME AT RS. NIL AFTER ADJUSTMENT OF BROUGHT FORWARD BUSINESS LOSS. AO ON VERIFICATION OF ASSESSMENT RECORDS NOTICED THAT ASSESSEE HAS CLAIMED RS. 2,12,25,036 / - BEING INT EREST WAIVED BY CENTRAL BANK OF INDIA ON ONE TIME SETTLEMENT, WAS CLAIMED AS DEDUCTION FROM THE TOTAL INCOME. AO OBSERVED THAT INTEREST WAIVED ON ONE TIME SETTLEMENT CANNOT BE EQUA TED WITH PAYMENT AND HENCE NOT ALLOWABLE AS DEDUCTION U/S 43B OF THE ACT. TH US, THE INCOME CHARGEABLE TO TAX AMOUNTING TO RS. 2,12,25,036/ - HAS ESCAPED THE ASSESSMENT AND ACCORDINGLY, AO ISSUED REASONS FOR INITIATING THE PROCEEDING U/S 147 OF THE ACT. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED AND SERVED ON THE ASSESSEE. 3 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. 3. IN PURSUANT TO NOTICE U/S 148 OF THE ACT, THE RETURN OF INCOME WAS FILED WITH A LETTER DATED 3 RD MAY 2012 IN WHICH, ASSESSEE HAS BROUGHT TO THE NOTICE OF AO THAT THE ERSTWHILE COMPANY M/S BOMBAY PAINTS LTD IS MERGED WITH THE ASSESSEE COMPANY AS PER THE ORDER OF THE BOARD FOR I NDUSTRIA L AND FINANCIAL RECONSTRUCTION R EHABILITATION SCHEME DATED 29.07.09, ACCORDINGLY M/S BOMBAY PAINTS LTD CEASE TO EXIST ON AND FROM 1 ST APRIL, 2009. A COPY OF THE ABOVE ORDER WAS ALSO BROUGHT TO THE NOTICE OF AO. IN THE SAME LETTER, ASSESSEE HAS ALSO OBJECTED TO THE INITIATION OF PROCEEDING U/S 147 OF THE ACT AS THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS OF THEIR INCOME NECESSARY FOR THE ASSESSMENT. FURTHER, A SSESSEE FILED ANOTHER L ETTER DATED 31 ST DEC 2012 . 4. AFTER CONSIDERING THE OBJECTIONS RAISED BY THE ASSESSEE, AO REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE AND INITIATED PROCEEDING U/S 147 OF THE ACT WITH THE OBSERVATION THAT THIS ISSUE WAS NOT DISCUSSED IN THE ASSESSMENT O RDER PASSED U/S 143(3) OF THE ACT, THEREFORE REOPENING U/S 148 ON THE INCOME OF ESCAPED INCOME IS CORRECT IN LAW. ACCORDINGLY, NOTICES U/S 142(1) AND 4 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. 143(2) WERE SERVED ON THE ASSESSEE. IN RESPONSE TO THE NOTICE U/S 143(2), AR OF THE ASSESSEE APPEARED AND FILED A DETAIL SUBMISSION, FOR THE SAKE OF CLARITY, WHICH IS REPRODUCED BELOW: - (I) WE REITERATE THAT PURSUANT TO THE ORDER OF THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION (REHABILITATION SCHEME) DATED 29 TH JULY, 2009 EFFECTIVE FROM 1 ST APRIL 2009 ERSTWHILE BOMBAY PAINTS LTD. STAND MERG ED AND AMALGAMATED WITH CRAUER & WEIL (I) LTD. ACCORDINGLY, BOMBAY PAINTS LTD. CEASED TO EXIST ON AND FROM 1 ST APRIL, 2009. COPY OF THE BIFR ORDER WAS SUBMITTED DURING THE COURSE OF ORIGINAL ASSESSMENT PRO CEEDINGS AND ALSO VIDE LETTER DATED 3 RD MAY, 2012. (II) THE 'REASONS' AS RECEIVED BY US ARE REPRODUCED BELOW: 'UNDER THE PROVISIONS OF ACT, INTEREST ON ANY LOANS OR ADVANCES FROM A SCHEDULED BANK IS ALLOWABLE AS DEDUCTION ON ACTUAL PAYMENT AND ANY SUC H INTEREST WHICH HAVE BEEN CONVERTED INTO A LOAN OR ADVANCE SHALL NOT BE DEEMED TO HAVE BEEN ACTUALLY PAID. IN THE PRESENT CASE, THE ASSESSEE COMPANY COMPUTED NIL INCOME AS SHOWN BELOW AND FILED ITS RETURN OF INCOME FOR AY 2008 - 09 ON 20/09/2008; 5 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. NET PROFI T AS PER P& L ACCOUNT 6,29,57,494 ADD : DISALLOWABLE AS PER RETURN 21,15,841 6,50,73,335 LESS: DEDUCTIONS (INCLUDING 5,42,99,098 DEDU. U/S 4334,91,40,749 / - ) 1,07,74,237 LESS : SET OFF OF B/F LOSSES OF AY 03 - 04 TO THE EXTENT OF INCOME 1,07,74,237 TOTAL INCOME NIL SCRUTINY OF RECORDS REVEALED THAT THE ASSESSEE CLAIMED RS.4,91,40,7591 - AS INTEREST DISALLOWED EARLIER NOW ALLOWABLE AS DEDUCTION U/S 43B ON THE STAND THAT THE ASSESSEE COMPANY HAD REACHED ONE TIME SETTLEMENT WITH CENTRAL BANK OF INDIA BY PAYING RS.995 LAKHS AS AGAINST THE LIABILITY OF RS. 1207 LAKHS. THE INTEREST WAIVED OF RS.212 LAKHS HAVE BEEN TREATED AS INCOME OF THE PREVIOUS YEAR I.E. FY 2007 - 08. FURTHER THE WAIVER OF INTEREST HAS ALSO CLAIMED AS DEDUCTION U/S 436 AS PAID DURING THE PREVIOUS YEAR RELEVANT TO AY 08 - 09. THE CLAIM HAS BEEN ALLOWED. THIS IS NOT IN ORDER AS THE INTEREST PAYABLE HAS NOT BEEN ACTUALLY PAID. THE ASSESSEE HAS ONLY PAID RS.279 LAKHS OUT OF TOTAL INTEREST OUTSTANDING AS ON 31.03.2007 OF R S.49140759/ - IN THE CURRENT FINANCIAL YEAR AND THE BALANCE AMOUNT OF RS.212 LAKHS IN RESPECT OF WAIVER OF INTEREST DUE TO RESTRUCTURING OF DUES BY THE BANK WAS TREATED AS INCOME OF CURRENT F.Y. 2007 - 08. THIS HAS RESULTED IN 6 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. UNDER ASSESSMENT OF INCOME OF RS .2,12,25,036/ - LEADING TO CARRY FORWARD OF A LIKE AMOUNT INVOLVING NOTIONAL TAX EFFECT OF RS.72,14,389/ - . IN THE TIGHT OF ABOVE, REMEDIAL ACTION U/S 148 IS BEING TAKEN. (II I) FROM 'REASONS' WE UNDERSTAND THAT THE ASSESSMENT IS RE - OPENED ON THE GROUND THAT INTEREST AMOUNTING RS. 212 LACS WAIVED BY CENTRAL BANK OF INDIA WAS TREATED AS INCOME, HOWEVER, THIS AMOUNT WAS NOT ACTUALLY PAID, AND AS SUCH NO DEDUCTION IS ALLOWABLE UNDER SECTION 438 OF THE ACT. (IV) IT WOULD BE APPRECIATED THAT M/S.BOMBAY PAINTS LTD H AD BEEN INCURRING LOSSES SINCE 2001 AND WAS FACING SEVER E FINANCIAL DIFFICULTIES. M/S.BOMBAY PAINTS LTD, FOLLOWING MERCANTILE METHOD OF ACCOUNTING, WAS UNDER STATUTORY OBLIGATION TO PROVIDE FOR THE INTEREST PAYABLE TO CENTRAL BANK ON LOANS AVAILED. HOWEVER , DUE TO FINANCIAL DIFFICULTIES, IT COULD NOT PAY SUCH INTEREST TO THE BANK. ACCORDINGLY , THE INTEREST SO PROVIDED IN THE BOOKS OF ACCOUNT FROM A.Y. 2003 - 04 ONWARDS WAS DISALLOWED UNDER SECTION 43B OF THE ACT AND ADDED TO THE TOTAL INCOME OF RESPECTIVE YEA RS. COPIES OF TAX AUDIT REPORTS, COMPUTATION OF INCOME AND THE ASSESSMENT ORDERS ARE ENCLOSED HEREWITH. IT IS AN UNDISPUTED FACT THAT INTEREST AGGREGATING TO RS. 4,91,40,762/ - PAYABLE TO CENTRAL 7 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. BANK OF INDIA, PROVIDED IN THE BOOKS FROM A. Y. 2003 - 04 ONWAR DS WAS DISALLOWED UNDER SECTION 43B OF THE ACT. (V) PURSUA NT TO ONE TIME SETTLEMENT WITH CENTRAL BANK OF INDIA, OUT OF T OTAL INTEREST OF RS. 4,91,40,76/ - , WE PAID A SUM OF RS. 2,79, 15,762/ - TO CENTRAL BANK OF INDIA AND THE BALANCE AMOUNT OF RS. 2,12,25,036 / - WAS WAIVED. ACCORDINGLY , RS. 2, 12,25,036/ - PROVIDED AS INTEREST EXPENSE IN EARLIER YEARS WAS WRITTEN BACK AND CREDITED TO THE PROFIT AND LOSS ACCOUNT. (VI) IT WOULD BE APPRECIATED THAT UNDER THE INCOME - TAX ACT SAID INTEREST AMOUNTING TO RS. 2,12,25,036/ - WAS NEVER ALLOWED AS DEDUCTION IN COMPUTING INCOME FOR RESPECTIVE YEARS AND AS SUCH SAME CANNOT BE INCLUDED IN TOTAL INCOME OF THE YEAR IN WHICH IT WAS WRITTEN BACK. (VII) THESE FACTS WERE DULY CONSIDERED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. IT WI LL NOT BE OUT OF CONTEXT TO STATE THAT AN AUDIT OBSERVATION CANNOT BE A BASIS FOR RE - OPENING THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT. (VIII) IT IS SUBMITTED THAT THE PROCEEDINGS UNDER SECTION 147 OF THE ACT CAN BE INITIATED IF AND ONLY IF THERE IS FAILURE ON PART OF THE ASSESSEE TO DISCLOSE FULLY AND 8 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. TRULY ALL MATERIAL FACTS OF THEIR INCOME NECESSARY FOR ASSESSMENT. WE SUBMIT THAT THE ASSESSEE COMPANY HAS FILED FULL AND COMPLETE PARTICULARS OF ITS INCOME. THERE IS NOT FAILURE ON THE PART OF THE ASSESSEE COMPANY TO DISCLOSE FULL AND CORRECT PARTICULARS OF INCOME AND HAVE BEEN ASSESSED ACCORDINGLY. THERE IS NO INCOME, WHICH HAS ESCAPED THE ASSESSMENT. 5. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, AO OBSERVED THAT ASSESSEE HAS CLAIMED RS . 4 , 91,40,759/ - AS INTEREST DISALLOWED EARLIER NOW ALLOWABLE AS DEDUCTION U/S 43B ON THE STAND THAT THE ASSESSEE COMPANY HAD REACHED ONE TIME SETTLEMENT WITH CENTRAL BANK OF INDIA BY PAYING RS. 995 LAKH AS AGAINST THE LIABILITY OF RS.1207 LAKHS. THE INTERES T WAIVED OF RS. 212 LAKH WAS TREATED AS INCOME OF THE PREVIOUS YEAR . FURTHER THE WAIVER OF INTEREST WAS ALSO CLAIMED AS DEDUCTION U/S 43B AS PAID DURING THE PREVIOUS YEAR . THE CLAIM OF THE ASSESSEE WAS ALLOWED AT THE TIME OF REGULAR ASSESSMENT PASSED U/S 1 43(3) OF THE ACT . ACCORDINGLY, AO DISALLOWED THE INTEREST EXPENDITURE CLAIMED AS DEDUCTION U/S 43B OF THE ACT. 6. AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND RAISED THE GROUNDS ON ISSUANCE OF 9 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. NOTICE U/S 148 OF THE ACT TO THE NON - EXISTING ENTITY, REOPENING OF ASSESSMENT U/S 148 OF THE ACT IS BAD IN LAW AS AO HAS NOT BROUGHT ON RECORD ANY FAILURE ON THE PART OF THE ASSESSEE AND ALSO RAISED THE GROUND ON MERITS OF THE CASE. HOWEVER, LD. CIT(A) HAS DISMISSED THE GROUNDS RAISED BY THE ASSESSEE ON MERITS AS WELL AS REOPENING OF ASSESSMENT . LD. CIT(A) WHILE ADJUDICATING GR. 1 & 2 RAISED BY THE ASSESSE ON THE ISSUE OF REOPENING OF THE ASSESSMENT ON THE NON - EXISTING ENTITY AND ALSO ON REOPENING OF THE AS SESSMENT, HE OBSERVED AS BELOW: - 4.1 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. THE APPELLANT HAD CLAIMED DEDUCTION IN RESPECT INTEREST AGGREGATING TO RS.2,12,25,036/ - RELATING TO THE PERIOD 2002 - 03 TO 2007 - 08, WRITTEN BACK DURING THE YEAR ON WAIVE R BY THE CENTRAL BANK OF INDIA PURSUANT TO 'ONE - TIME SETTLEMENT (OTS). THE APPELLANT WAS FOLLOWING MERCANTILE METHOD OF ACCOUNTING AND PROVIDED FOR THE INTEREST PAYABLE TO BANK IN RESPECTIVE YEARS AND THE UNPAID AMOUNT INTEREST WAS DISALLOWED UNDER SECTION 43B IN THE RESPECTIVE YEARS. IT IS SUBMITTED THAT INTEREST NOT ALLOWED AS DEDUCTION IN EARLIER YEARS, CANNOT BE TAXED IN THE ON WRITE BACK. IT IS SEEN THAT IN THE APPELLANT'S 10 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. CASE THE. A.O. IS JUSTIFIED THE ISSUANCE OF NOTICE U/S. 148 OF THE ACT, THAT JUD ICIAL DECISIONS RELIED UPON BY THE ASSESSEE WERE DISTINGUISHABLE ON FACTS, THAT THE ISSUANCE OF NOTICE U/S. 148 WAS ENTIRELY BASED ON THE APPELLANT'S FAILURE TO SHOW HIS INCOME/LOSS CORRECTLY UNDER A PROPER HEAD. RELYING UPON THE CASES OF RAYMOND WOLLEN MI LLS LTD (236 ITR 34), DR. AMINS PATHOLOGY LABORATORY (252 ITR 673); AND CHETTINAD CORPORATION LTD (200 ITR 320) IT IS HELD THAT THE RE - OPENING U/S. 147 R.W.S. 148 BY THE A.O. WAS JUSTIFIED. ACCORDINGLY THESE GROUNDS OF APPEAL ARE DISMISSED. 7 . AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE PREFERRED THE APPEAL BEFORE US ON THE GROUND MENTIONED HEREIN BELOW: - 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE RE - OPENING OF ASSESSMENT OF M/S. BOMBAY PAINTS LTD. U/S 148 OF THE INCOME - TAX ACT, 1961. IT IS SUBMITTED THAT PURSUANT TO ORDER OF THE BOARD OF INDUSTRIAL & FINANCIAL RECONSTRUCTION (REHABILITATION) SCHEME (BIFR), THE SAID BOMBAY PAINTS LTD., WAS MERGED WITH THE APPELLANT AND ACCORDINGLY CEASED TO EXIST ON AND FROM 1 ST APRIL 2008. THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT TO SAID BOMBAY PAINTS 11 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. LTD., WHICH DOES NOT EXIST ON THAT DATE IS BAD IN LAW AND CANNOT BE PROCEEDED WITH. THE NOTICE UNDER SECTION 148 IS BAD IN LAW AND OUGHT TO BE CANCELLED. 2. THE LEARNED COMM ISSIONER OF INCOME - TAX ERRED IN UPHOLDING THE ORDER UNDER SECTION 148 R.W.S. 143(3). THE LEARNED ASSESSING OFFICER FAILED TO COMPLY WITH THE PROCEDURE LAID DOWN IN THE ACT FOR RE - ASSESSMENT. IT IS SUBMITTED THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO RE - OPEN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT. THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 148 DATED 7 TH MARCH 2013 IS BAD IN LAW AND OUGHT TO BE CANCELLED. 3. THE LEARNED COMMISSIONER OF INCOME - TAX AND THE ASSESSING OFFICER ERRED IN N OT ALLOWING DEDUCTION IN RESPECT OF INTEREST AGGREGATING TO RS.2,12,25,036/ - RELATING TO PERIOD 2002 - 03 TO 2007 - 08 WRITTEN BACK DURING THE YEAR ON WAIVER BY CENTRAL BANK OF INDIA PURSUANT TO ONE TIME CENTRAL BANK OF INDIA, PURSUANT TO ONE TIME SETTLEMENT ( OTS). 12 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. IT IS SUBMITTED THAT SAID INTEREST WAS NOT ALLOWED AS DEDUCTION IN EARLIER YEARS AND AS SUCH CANNOT BE TAXED IN THE YEAR IN WHICH IT IS WRITTEN BACK. THE CONCLUSION ARRIVED AT BY THE LEARNED COMMISSIONER OF INCOME - TAX AND BY THE LEARNED ASSESSING OFF ICER IS ERRONEOUS, CONTRARY TO THE FACTS. 4. THE APPELLANT RESERVES THE RIGHT TO ADD TO, ALTER OR AMEND THE GROUNDS OF APPEAL 8 . BEFORE US, LD. A R SUBMITTED THAT THERE IS THREE ISSUE INVOLVED IN THIS APPEAL. THE FIRST ISSUE IS ISSUE ON NOTICE U/S 148 OF THE ACT IN THE NAME OF THE NON - EXISTING ENTITY AND ALSO COMPLETING THE RE - ASSESSMENT ON NON - EXISTING ENTITY. THE SECOND ISSUE RELATES TO UPHOLDING THE ORDER BY LD. CIT(A) U/S 148 R.W.S. 143 (3) OF THE ACT AS THE AO HAS NO JURI SDICTION TO REOPEN THE ASSESSMENT AND SUCH REOPENI NG WAS BAD IN LAW AND FINALLY LD. AR SUBMITTED THAT ASSESSEE HAS MERIT ON THE CASE AS ASSESSEE HAS NEVER CLAIMED ANY INTEREST EXPENDITURE AS THE ASSESSEE HAS NOT PAID ANY BANK INTEREST, WHICH WAS DISALLOWED U/S 43B OF THE ACT. DURING THIS AY DUE TO RECONSTRUCTION AND REHABILITATION, ASSESSE REACHED ONE TIME SETTLEMENT WITH CENTRAL BANK OF INDIA AND BANK 13 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. HAS WAIVED INTEREST EXPENDITURE TO THE EXTENT OF RS. 2,12,25,036/ - . HE FURTHER SUBMITTED THAT SINCE ASSESS EE HAS NOT CLAIMED ANY EXPENDITURE AND THIS INCOME CANNOT BE DECLARED AS INCOME OF THE ASSESSEE U/S 41 OF THE ACT. 9. COMING TO THE ISSUE OF REASSESSMENT AND ISSUE OF NOTICE ON NON - EXISTING ENTITY, HE BROUGHT TO OUR NOTICE ISSUED U/S 148 OF THE ACT DATED 02.03.12, WHICH IS PLACED ON RECORD IN THE PAPER BOOK AND SUBMITTED THAT THE ABOVE NOTICE WAS ISSUED IN THE NAME OF M/S BOMBAY PAINTS LTD. HE FURTHER BROUGHT TO OUR NOTICE A LETTER DATED 31 ST OCT 2011 IN WHICH ASSESSE E THROUGH AR BROUGHT TO THE NOTICE TO AO THAT THE BOMBAY PAINTS LTD. HAS MERGED WITH THE ASSESSEE COMPANY AND SUBMITTED A COPY OF MERGER, ASSESSMENT ORDER FOR AY 2008 - 09 AND OTHER RELEVANT INFORMATION AT THE TIME OF ASSESSMENT PROCEEDING FOR AY 2009 - 10. FURTHER, HE BR OUGHT TO OUR NOTICE COPY OF THE LETTER DATED 3 RD MAY 2012 IN WHICH ASSESSEE HAS CLEARLY BROUGHT ON RECORD THE DETAILS OF MERGER OF M/S BOMBAY PAINTS LTD. WITH THE ASSESSEE COMPANY AND SIMILAR INFORMATION WAS ALSO SUBMITTED BEFORE THE AO VIDE LETTER DATED 1 6 TH FEB 2013. HE BROUGH T TO OUR NOTICE THAT THE 14 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147, IN WHICH REASSESSMENT ORDER WAS PASSED IN THE NAME OF M/S BOMBAY PAINTS LTD. WHICH IS A NON - EXISTING ENTITY. FURTHER, HE RELIED UPON THE DECISION IN THE CASE OF PCIT VRS. MARUTI SUZUKI LTD (2019) 416 ITR 613 (SC), IN WHICH DEPARTMENT WAS IN APPEAL BEFORE HONBLE SUPREME COURT AGAINST THE ORDER OF HONBLE DELHI HIGH COURT DATED 09.01.2018 IN WHICH HONBLE HIGH COURT UPHELD THE DECISION OF HONBLE ITAT. THE HONBLE ITAT HELD THAT THE ASSESSMENT MADE IN THE NAME O F M/S SUZUKI POWER TRAIN INDIA LTD FOR THE AY 2012 - 13 IS A NULLITY SINCE THE ENTITY HAD BEEN AMALGAMATED WITH MARUTI SUZUKI INDIA LTD UNDER AND APPROVED SCHEME OF AMALGAMATION AND WAS NOT IN EXISTENCE. FURTH ER, HE BROUGHT TO OUR NOTICE THAT IN THE ABOVE CASE, THE ASSESSMENT WAS FRAMED IN THE AMALGAMATING COMPANIES WHICH WAS NOT IN EXISTENCE. HOWEVER, IN THE ASSESSMENT ORDER , THE NAMES OF BOTH AMALGAMATED COMPANY AND AMALGAMATING WERE MENTIONED. EVEN THEN THE HONBLE SUPREME UPHELD THE ORDER OF HONBLE HIGH COURT IN NULLIFYING THE ASSESSMENT. HE FURTHER SUBMITTED THAT IN THE CASE OF ASSESSEE, THERE WAS NO MENTION OF AMALGAMATED COMPANY IN THE ASSESSMENT ORDER. THEREFORE, THE RE - ASSESSMENT 15 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. WAS FRAMED AGAINST THE COMPANY, WHICH IS NOT IN EXISTENCE AND HE PRAYED THAT THE ASSESSMENT SHOULD BE QUASHED. 10 . ON THE OTHER HAND, LD. D R BROUGHT TO OUR NOTICE AT PARA NO. 4 OF THE ASSESSMENT ORDER AND PARA 4.1 OF THE ORDER OF LD. CIT(A) AND SUPPORTED THE CONCLUSION REACHED BY THE TAX AUTHORITIES BELOW. 11 . CONSIDERING THE RIVAL SUBMISSION AND MATERIAL PLACED ON RECORD, WE NOTICE FROM THE RECORDS SUBMITTED BEFORE US THAT ASSESSEE COMPANY IS THE SUCCESSOR OF THE BOMBAY PAINTS LTD. WHICH IS MERGED WITH THE ASSESSEE COMPANY BY THE ORDER OF BOARD OF INDUSTRIAL & FINANCIAL RECONSTRUCTION (REHABILITATION) SCHEME DATED 29.07.09. AS PER THE ABOVE ORDER, THE ERSTWHILE COMPANY, BOMBAY PAINTS LTD CEASE TO EXIST FROM 1 ST APRIL, 2009. HOWEVER, WE NOTICE THAT THE ORIGINAL ASSESSMENT ORDER PASSED IN THE NAME OF BOMBAY PAINTS LTD ON 01.12.10. DURING VERIFICATION, AO OBSERVED THAT ASSESSEE H AS CLAIMED DEDUCTION U/S 43B TO THE EXTENT OF RS. 4,91,40,759/ - . WHEREAS DURING THIS YEAR, ASSESSEE HAS REACHED ONE TIME 16 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. SETTLEMENT WITH CENTRAL BANK OF INDIA AND DID NOT PAID THE INTEREST TO THE EXTENT OF RS. 2,12,25,036/ - . IN ORDER TO BRING TO TAX, THE A BOVE CLAIM OF THE ASSESSEE, AO HAS INITIATED PROCEEDING U/S 147 OF THE ACT AGAINST THE ERSTWHILE COMPANY I.E. BOMBAY PAINTS LTD. EVEN THOUGH ASSESSEE VIDE ITS LETTER DATED 3 RD MAY 2012 AND 31 ST DEC 2012 HAS OBJECTED THE PROCEEDING U/S 147 AND THE COMPLETION OF ASSESSMENT U/S 143(3) R.W.S. 147 IN THE NAME OF ERSTWHILE COMPANY I.E. BOMBAY PAINTS LTD. 12. IN OUR CONSIDERED VIEW, AT THE TIME OF INITIATING PROCEEDING U/S 147 AND COMPLETION OF RE - ASSESSMENT PROCEEDING, THE ERSTWHILE COMPANY BOMBAY PA INTS LTD WAS NOT IN EXISTENCE AND THE AO CANNOT MAKE ASSESSMENT UNDER THE NAME OF AN ENTITY WHICH IS NOT IN EXISTENCE AS HELD IN THE CASE OF PCIT VRS. MARUTI SUZUKI INDIA LTD (SUPRA), WHEREIN IT WAS HELD AS UNDER : - 33 IN THE PRESENT CASE, DESPITE THE FACT THAT THE ASSESSING OFFICER WAS INFORMED OF THE AMALGAMATING COMPANY HAVING CEASED TO EXIST AS A RESULT OF THE APPROVED SCHEME OF AMALGAMATION, THE JURISDICTIONAL NOTICE WAS ISSUED ONLY IN ITS NAME. THE BASIS ON WHICH JURISDICTION WAS INVOKED WAS FUNDAMENT ALLY AT ODDS 17 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. WITH THE LEGAL PRINCIPLE THAT THE AMALGAMATING ENTITY CEASES TO EXIST UPON THE APPROVED SCHEME OF AMALGAMATION. PARTICIPATION IN THE PROCEEDINGS BY THE APPELLANT IN THE CIRCUMSTANCES CANNOT OPERATE AS AN ESTOPPEL AGAINST LAW. THIS POSITION NOW HOLDS THE FIELD IN VIEW OF THE JUDGMENT OF A CO - ORDINATE BENCH OF TWO LEARNED JUDGES WHICH DISMISSED THE APPEAL OF THE REVENUE IN SPICE ENFOTAINMENT ON 2 NOVEMBER 2017. THE DECISION IN SPICE ENFOTAINMENT HAS BEEN FOLLOWED IN THE CASE OF THE RESPONDENT WHI LE DISMISSING THE SPECIAL LEAVE PETITION FOR AY 2011 - 2012. IN DOING SO, THIS COURT HAS RELIED ON THE DECISION IN SPICE ENFOTAINMENT (SUPRA). 34 WE FIND NO REASON TO TAKE A DIFFERENT VIEW. THERE IS A VALUE WHICH THE COURT MUST ABIDE BY IN PROMOTING THE INTE REST OF CERTAINTY IN TAX LITIGATION. THE VIEW WHICH HAS BEEN TAKEN BY THIS COURT IN RELATION TO THE RESPONDENT FOR AY 2011 - 12 MUST, IN OUR VIEW BE ADOPTED IN RESPECT OF THE PRESENT APPEAL WHICH RELATES TO AY 2012 - 13. NOT DOING SO WILL ONLY RESULT IN UNCERT AINTY AND DISPLACEMENT OF SETTLED EXPECTATIONS. THERE IS A SIGNIFICANT VALUE WHICH MUST ATTACH TO OBSERVING THE REQUIREMENT OF CONSISTENCY AND CERTAINTY. INDIVIDUAL AFFAIRS ARE CONDUCTED AND BUSINESS DECISIONS ARE MADE IN THE EXPECTATION OF CONSISTENCY, 18 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. UN IFORMITY AND CERTAINTY. TO DETRACT FROM THOSE PRINCIPLES IS NEITHER EXPEDIENT NOR DESIRABLE. 13. RESPECTFULLY FOLLOWING THE ABOVE DECISION, THE ASSESSMENT MADE IN THE NAME OF NON - EXISTING ENTITY WOULD BE WITHOUT JURISDICTION AND ACCORDINGLY IT IS SET ASIDE . ACCORDINGLY, GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED AND GROUND NO. 2 & 3 ARE NOT ADJUDICATED AS BECOME ACADEMIC IN NATURE. 1 4 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCT 20 19 . SD/ - SD/ - ( RAM LAL NEGI ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 30 . 10 .201 9 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 19 I.T.A. NO. 384 /MUM/201 7 M/S GRAUER & WEIL (I) LTD. 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI