Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 1219 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-01-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
08-01-2018
Assessment Year
2012-2013
Appeal Filed On
03-10-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 584/LKW/2016 ASSESSMENT YEAR: 2012 - 13 DCIT CENTRAL CIRCLE II KANPUR V. M/S CHANDAK HOUSING PVT. LTD. 7/191, SWAROOP NAGAR KANPUR T AN /PAN : AAACE4306J (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI J. S. MINHAS, CIT (DR) RESPONDENT BY: SHRI RAKESH GARG, ADVOCATE DATE OF HEARING: 08 01 201 8 DATE OF PRONOUNCEMENT: 09 01 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF THE LD. CIT(A) IV, KANPUR DATED 5/7/2016. 2 . THE SOLE GRIEVANCE OF THE REVENUE IS THAT WHETHER THE PROCEEDINGS INITIATED UNDER SECTION 147/148 OF THE ACT ON 31/3/2015 AND THE ASSESSMENT ORDER PASSED IN THE CASE OF THE ASSESSEE - COMPANY , WHICH DID NOT EXIST ON ACCOUNT OF ITS MERGER WITH ANOTHER COMPANY , W ERE WITHOUT JURISDICTION. 3 . THE BRIEF FACTS APPEARING IN THE CASE OF THE ASSESSEE ARE THAT A SEARCH AND SEI ZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN KAMAL CHANDAK GROUP OF CASES ON 24/10/2013 WHEREIN VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE D EPARTMENT WAS IN POSSESSION OF CERTAIN INFORMATION , ON THE BASIS OF ITA NO.584/LKW/2016 PAGE 2 OF 10 WHICH THE CASE OF ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT AND NOTICE UNDER SECTION 148 OF THE ACT DATED 23/3/2015 WAS ISSUED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EXAMINED THE CLAIM OF SET OFF OF CAPITAL LOSS ON SALE OF SHARES AN D DISALLOWED SET OFF OF SHORT TERM CAPITAL LOSS OF RS.1,37,16,718/ - . 4 . BEFORE THE LD. CIT(A), ASSESSEE HAS CHALLENGED THE PROCEEDINGS INITIATED UNDER SECTION 147 READ WITH 148 OF THE ACT , AS ON THE DATE OF INITIATION OF ACTION , THE COMPANY WAS MERGED WITH AN OTHER COMPANY AND THE ASSESSEE COMPANY ITSELF WAS NOT IN EXISTENCE. THE LD. A.R. OF THE ASSESSEE HAD FILED A DETAILED SUBMISSION BEFORE THE LD. CIT(A) , WHICH IS REPRODUCED HEREUNDER : - THE APPELLANT IN THE PRESENT APPEAL FILED ON 02.07.2015 VIDE ACKNOWLED GEMENT RECEIPT NO. KNP/792 DATED 02.07.2015 HAS TAKEN 9 GROUNDS OF APPEAL AS IS EVIDENT FROM ANNEXURE - 2 OF APPEAL MEMO (FORM - 35) FORMING INTEGRAL PART OF APPEAL. IN THE COURSE OF PREPARATION OF APPEAL AND FURTHER TO WRITTEN SUBMISSIONS DATED 27.05.2016 DIS CUSSED IN THE COURSE OF HEARING ON 27.05.2016, FOLLOWING FACTS HIT AT THE ROOT OF THE MATTER AND RELATING TO THE JURISDICTION RIGHT FROM PRE SEARCH ASSESSMENT TO POST SEARCH TRANSFER OF JURISDICTION TO THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 11, KANPUR. A STATEMENT UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 OF SHRI KAMAL KISHORE CHANDAK WAS RECORDED ON OATH ON 24.10.2013 AT THE BUSINESS PREMISES OF MS. CHANDAK BUILDERS DEVELOPERS PVT. LTD., 603 CITY CENTRE, 63/2, THE MALL KANPUR BY SHRI UME SH BHARTI, RIZED OFFICER UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 QUESTION NO. 18 OF THE SAID STATEMENT (PAGE NO. 7) IS IMPORTANT AND YOUR KIND ATTENTION IS DRAWN ON THE SAME WHICH INTER ALIA CLEARLY MENTION (AS PER A. O.) '...YOU HAVE ORALLY MENTIONED IN OPENING STATEMENT THAT CHANDAK HOUSING PVT. LTD. GOT AMALGAMATED/MERGED WITH M/S. CHANDAK BUILDERS & DEVELOPERS ITA NO.584/LKW/2016 PAGE 3 OF 10 PVT. LTD.' A COPY OF THE SAID STATEMENT RECORDED ON OATH IS ATTACHED AND MARKED AS ANNEXURE - 1 FOR YOUR HONOUR'S READY REFERENCE. II) THAT TH E THEN INCOME TAX INSPECTOR WITH DY. COMMISSIONER OF INCOME TAX/ASSTT. COMMISSIONER OF INCOME, CENTRAL CIRCLE - 11, KANPUR, SHRI SUSHIL CHANDRA SRIVASTAVA WAS REQUIRED TO SERVE A NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961, ADDRESSED TO M/S. CHANDA K HOUSING PVT. LTD., 603, CITY CENTRE, THE MALL KANPUR, THROUGH SHRI KAMA! KISHORE CHANDAK. HE VIDE HIS WRITTEN REPORT DATED INFORMED THE A.O. (I.E. THE ACIT, C.C. - LL, KANPUR) THAT M/S. CHANDAK HOUSING PVT. LTD. TOGETHER WITH OTHER TWO GROUP COMPANIES GOT AMALGAMATED WITH M/S. CHANDAK BUILDERS & DEVELOPERS PVT. LTD. WITH EFFECT FROM 01.04.2012. THE INCOME TAX INSPECTOR ALSO ATTACHED COPY OF A LETTER SIGNED BY SHRI KAMA! KISHORE CHANDAK, ERSTWHILE DIRECTOR OF 3 GROUP COMPANIES INCLUDING M/S. CHANDAK HOUSING PVT. LTD. [PAN AAACE4306J] DATED 03.12.2012, (COPY OF LETTER ATTACHED MARKED ANNEXURE 2) WHEREIN IT WAS INFORMED TO THE INCOME TAX. OFFICER, WARD - 6(2), RANGE - 6, KANPUR THAT M/S. CHANDAK HOUSING PVT. LTD. GOT AMALGAMATED WITH M/S. CHANDAK BUILDERS & DEVELO PERS PVT. LTD. WITH EFFECT FROM 01.04.2012 AS PER THE ORDER OF THE HON'BLE ALLAHABAD HIGH COURT DATED 06.11.2012 RECEIVED ON 01.12.2012. IN THE SAID LETTER IT WAS CATEGORICALLY MENTIONED THAT M/S. CHANDAK HOUSING PVT. LTD. (AND OTHER TWO COMPANIES) CEASED TO EXIST WITH EFFECT FROM 01.04.2012 AND IT WAS ALSO REQUESTED TO CANCEL THEIR PAN NUMBER(S). LASTLY, IT WAS ALSO MENTIONED THAT THE INFORMATION VIDE REFERENCED LETTER MAY BE TREATED AS INFORMATION GIVEN UNDER SECTION 176(3) OF THE INCOME TAX ACT, 1961. II I) THE LD. A.O. HAS CATEGORICALLY MENTIONED IN PARA 2 OF THE IMPUGNED ASSESSMENT ORDER DATED 03.06.2015 (UNDER APPEAL) THAT CASE OF M/S. CHANDAK HOUSING PVT. LTD. WAS CENTRALIZED UNDER SECTION 127 OF THE INCOME TAX ACT, 1961 VIDE ORDER NO. 23/2013/14 DATED 06.02.2014 PASSED BY THE LD. C.I.T. - II, KANPUR. AS MENTIONED HEREINBEFORE YOUR ATTENTION IS INVITED TO THE LETTER OF SHRI KAMA! KISHORE CHANDAK DATED 03.12.2012, VIDE WHICH IT WAS INFORMED TO THE A.O. THAT THE COMPANY HAS SINCE AMALGAMATED ITA NO.584/LKW/2016 PAGE 4 OF 10 AND CEASED TO E XIST. HOWEVER, A COPY OF REFERENCED ORDER DATED 06.02.2014 IS ALSO ATTACHED AND MARKED AS ANNEXURE - 3 FOR YOUR HONOUR'S READY REFERENCE. IN THE LIGHT OF FACTS STATED ABOVE, THE FOLLOWING IMPORTANT LEGAL ISSUES EMERGED IN THE APPEAL UNDER REFERENCE: A) SHRI KAMAL KISHORE CHANDAK, ERSTWHILE DIRECTOR OF M/S. CHANDAK HOUSING PVT. LTD . CATEGORICALLY INFORMED THE AUTHORIZED OFFICER [UNDER SECTION 132(1) OF THE INCOME TAX - ACT, 1961] THAT M/S. CHANDAK HOUSING PVT. LTD. HAS AMALGAMATED WITH M/S. CHANDAK BUILDERS & DE VELOPERS PVT. LTD. IN HIS STATEMENT RECORDED ON OATH UNDER SECTION 132(4) PURPOSES OF SECTION 41(1) OF THE ACT, THE AMALGAMATION OF THE TWO COMPANIES WAS EFFECTED UNDER THE ORDER OF THE HIGH COURT IN PROCEEDINGS UNDER SECTION 391 READ WITH SECTION 394 OF T HE COMPANIES ACT. THE SARASWATI INDUSTRIAL SYNDICATE, THE TRANS FREE COMPANY WAS A SUBSIDIARY OF THE INDIAN SUGAR COMPANY, NAMELY, THE TRANSFEROR COMPANY. UNDER THE SCHEME OF AMALGAMATION THE INDIAN SUGAR COMPANY STOOD DISSOLVED ON 29TH OCTOBER, 1962 AND I T CEASED TO BE IN EXISTENCE THEREAFTER. THOUGH THE SCHEME PROVIDED THAT THE TRANSFEREE COMPANY THE SARASWATI INDUSTRIAL SYNDICATE LTD. UNDERTOOK TO MEET ANY LIABILITY OF THE INDIAN SUGAR COMPANY WHICH THAT COMPANY INCURRED OR IT COULD INCUR, ANY LIABILITY, BEFORE THE DISSOLUTION OR NOT THEREAFTER. GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CHANGE AND THE RIGHTS OF THE SHARE HOLDERS AND CREDITORS ARE VARIED, IT AMOUNTS TO RECONSTRUCTION OR REORGANISATION OR SCHEME BY MERGER OR BY TAKING OVER BY ANOTHER . RECONSTRUCTION OR AMALGAMATION HAS NO PRECISE LEGAL MEANING. THE AMALGAMATION IS A BLENDING OF TWO OR MORE EXISTING UNDERTAKING INTO ONE UNDERTAKING THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHARE HOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKINGS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER OF ONE OR MORE UNDERTAKINGS TO AN EXISTING COMPANY. STRICTLY AMALGAMATION DOES NOT COVER THE MERE ACQUI SITION BY A COMPANY OF THE SHARE CAPITAL OF OTHER COMPANY WHICH REMAINS IN EXISTENCE AND ITA NO.584/LKW/2016 PAGE 5 OF 10 CONTINUES ITS UNDERTAKING BUT THE CONTEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISITION. SEE HALSBURYS LAWS OF ENGLAND 4TH EDIT ION VOL. 7 PARA 1539. TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THERE MAY BE ABSORPTION OR BLENDING OF ONE BY THE OTHER, BOTH AMOUNTS TO AMALGAMATION. WHEN TWO COMPANIES ARE MERGED AND ARE SO JOINED, AS TO FORM A THIRD COMPANY OR ONE IS ABSORBED IN TO ONE OR BLENDED WITH ANOTHER, THE AMALGAMATING COMPANY LOSES ITS ENTITY... IN HOLDING THE ABOVE PROPOSITION THE COURT REFERRED TO ITS EARLIER JUDGMENT IN GENERAL RADIO AND APPLIANCES CO. LID. VS. M.A. KHADER (1986) 60 COMP CASE 1013. THE EFFECT OF THE D ISSOLUTION IS THAT THE COMPANY NO MORE SURVIVES. THE DISSOLUTION PUTS AN END TO THE EXISTENCE OF THE COMPANY. IT IS HELD IN M.H. SMITH (PLANT HIRE) LID. VS. D.L. MAINWARING (T/A INSHORE), 1986 BCLC 342 (CA) THAT '...ONCE A COMPANY IS DISSOLVED IT BECOMES A NON - EXISTENT PARTY AND THEREFORE NO ACTION CAN BE BROUGHT IN ITS NAME. ONCE IT IS FOUND THAT ASSESSMENT IS FRAMED IN THE NAME OF NON - EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURAL IRREGULARITY OF THE NATURE WHICH COULD BE CURED BY INVOKING THE PROVISION S OF SECTION 292B OF THE ACT. THE FRAMING OF ASSESSMENT AGAINST A NON - EXISTING ENTITY/PERSON GOES TO THE ROOT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARITY BUT A JURISDICTIONAL DEFECT AS THERE CANNOT BE ANY ASSESSMENT AGAINST A 'DEAD PERSON'. YOUR K IND ATTENTION IS ALSO DRAWN ON THE FOLLOWING DECISIONS: I)MODI CORPN. LTD. VS. JT. CIT[2007] 162 TAXMAN 214 (DELHI) (MAG) '...COMPLETION OF ASSESSMENT IN THE NAME OF AMALGAMATING COMPANY, SUBSEQUENT TO AMALGAMATION BECOMING EFFECTIVE AND FACT OF SUCH AMAL GAMATION HAVING BEEN BROUGHT TO NOTICE OF ASSESSING OFFICER, IS BAD IN LAW AND VOID - AB - INITIO...' '...14. IN VIEW OF THE LEGAL POSITION AS LAID DOWN IN THE AFORESAID DECISIONS, IT IS CLEAR THAT THE ASSESSMENT MADE IN THE PRESENT CASE ITA NO.584/LKW/2016 PAGE 6 OF 10 IN THE NAME OF M/S. CA LCUTTA INSTALMENTS COMPANY P. LTD. AFTER THE DATE OF ITS DISSOLUTION WAS NOT VALID. THE FACT THAT THIS COMPANY FILED A RETURN OF INCOME IS NOT OF ANY CONSEQUENCE. THE ASSESSMENT IS THEREFORE HELD TO BE INVALID AND IS CANCELED...' II)RUSTAGI ENGINEERING UDY OG (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME - TAX [2016] 67 TAXMANN.COM 284 (DELHI) '...AMALGAMATING COMPANY WOULD STAND DISSOLVED FROM THE DATE ON WHICH AMALGAMATION/TRANSFER TAKES EFFECT...IMPUGNED NOTICES UNDER SECTION 148 SEEKING TO RE O PEN ASSESSMENT OF ASSESSEE (AMALGAMATING COMPANY] WERE ISSUED AFTER ASSESSEE HAD AMALGAMATED WITH THE PETITIONER COMPANY AND WAS NO LONGER IN EXISTENCE...NOTICES HAVING BEEN ISSUED TO ASSESSEE THAT HAD CEASED TO EXIST WERE LIABLE TO BE SET ASIDE...' YOUR HUMBLE PETITIONE R WITH ALL HUMILITY AT ITS COMMAND BEGS TO PRAY FOR ADMISSION OF FOLLOWING ADDITIONAL GROUNDS OF APPEAL, PERMISSIBLE FOR ADMISSION UNDER SECTION 250(5) OF THE INCOME TAX ACT, 1961:' 5 . THEREAFTER , THE LD. CIT(A) AFTER CONSIDERING THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS OF THE ASSESSEE , HELD THAT M/S CHANDAK HOUSING PVT. LTD. HAS AMALGAMATED WITH M/S CHANDAK BUILDERS & DEVELOPERS PVT. LTD. W.E.F. 1/4/2012 BY VIRTUE OF THE HON'BLE ALLAHABAD HIGH COURT ORDER DATED 6/11/2012. ONCE THE COMPANY IS AMALGAMA TED WITH ANOTHER COMPANY, IT LOSES ITS EXISTENCE FROM THE EFFECTIVE DATE. ON THIS ISSUE , THE HON'BLE APEX COURT IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT, 186 ITR 278 HAS HELD AS UNDER: - '...THE QUESTION IS WHETHER ON THE AMALGAMATION OF THE INDIAN SUGAR COMPANY WITH THE APPELLANT COMPANY, THE INDIAN SUGAR COMPANY CONTINUED TO HAVE ITS ENTITY AND WAS ALIVE FOR THE PURPOSES OF SECTION 41(1) OF THE ACT. THE AMALGAMATION OF THE TWO COMPANIES WAS EFFECTED UNDER THE ORDER OF THE HIGH COURT IN P ROCEEDINGS UNDER SECTION 391 READ WITH SECTION 394 OF THE ITA NO.584/LKW/2016 PAGE 7 OF 10 COMPANIES ACT. THE SARASWATI INDUSTRIAL SYNDICATE, THE TRANSFEREE COMPANY WAS A SUBSIDIARY OF THE INDIAN SUGAR COMPANY, NAMELY, THE TRANSFEROR COMPANY. UNDER THE SCHEME OF AMALGAMATION THE INDIAN SU GAR COMPANY STOOD DISSOLVED ON 29TH OCTOBER, 1962 AND IT CEASED TO BE IN EXISTENCE THEREAFTER. THOUGH THE SCHEME PROVIDED THAT THE TRANSFEREE COMPANY THE SARASWATI INDUSTRIAL SYNDICATE LTD. UNDERTOOK TO MEET ANY LIABILITY OF THE INDIAN SUGAR COMPANY WHICH THAT COMPANY INCURRED OR IT COULD INCUR, ANY LIABILITY, BEFORE THE DISSOLUTION OR NOT THEREAFTER. GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CHANGE AND THE RIGHTS OF THE SHARE HOLDERS AND CREDITORS ARE VARIED, IT AMOUNTS TO RECONSTRUCTION OR REORGANI SATION OR SCHEME BY MERGER OR BY TAKING OVER BY ANOTHER. RECONSTRUCTION OR AMALGAMATION HAS NO PRECISE LEGAL MEANING. THE AMALGAMATION IS A BLENDING OF TWO OR MORE EXISTING UNDERTAKING INTO ONE UNDERTAKING THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHARE HOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKINGS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER OF ONE OR MORE UNDERTAKINGS TO AN EXISTING COMPA NY. STRICTLY AMALGAMATION DOES NOT COVER THE MERE ACQUISITION BY A COMPANY OF THE SHARE CAPITAL OF OTHER COMPANY WHICH REMAINS IN EXISTENCE AND CONTINUES ITS UNDERTAKING BUT THE CONTEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISITION. SEE HALSBURYS LAWS OF ENGLAND 4TH EDITION VOL. 7 PARA 1539. TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THERE MAY BE ABSORPTION OR BLENDING OF ONE BY THE OTHER, BOTH AMOUNT TO AMALGAMATION. WHEN TWO COMPANIES ARE MERGED AND ARE SO JO INED, AS TO FORM A THIRD COMPANY OR ONE IS ABSORBED INTO ONE OR BLENDED WITH ANOTHER, THE AMALGAMATING COMPANY LOSES ITS ENTITY... ' 6 . FURTHER , IN THE CASE S OF GENERAL RADIO AND APPLIANCES CO. LTD. VS. M.A. KHADER [1986] 60 COMP CASE 101 ; MODI CORPN. LTD. VS . JT. CIT [2007] 162 TAXMAN 214 (DELHI) AND RUSTAGI ENGINEERING UDYOG (P) LTD. VS. DCIT [2016] 67 TAXMANN.COM 284 (DELHI), IT HAS BEEN HELD THAT ONCE ITA NO.584/LKW/2016 PAGE 8 OF 10 THE COMPANY IS AMALGAMATED WITH ANOTHER COMPANY, IT STANDS DISSOLVED AND BECOMES NON - EXISTENT FROM THE EFF ECTIVE DATE AND NO NOTICE CAN BE SENT TO A DISSOLVED COMPANY. 7 . THE LD. CIT(A) ACCORDINGLY HELD THAT THIS BEING A LEGAL AND FACTUAL POSITION, IT IS CLEAR THAT THE ASSESSING OFFICER CANNOT TAKE ACTION UNDER SECTION 147/148 OF THE ACT IN THE CASE OF THE ASSE SSEE , BEING A NON - EXISTENT FROM THE EFFECTIVE DATE AND FURTHER NO CONSEQUENTIAL ASSESSMENT CAN BE MADE UNDER SECTION 143(3) OF THE ACT. HE HELD THAT T HE ACTION TAKEN UNDER SECTION 147/148/143(3) OF THE ACT BECOMES VOID AB - INITIO AND ACCORDINGLY RELIEF WAS ACCORDED TO THE ASSESSEE. 8 . BEING FURTHER AGGRIEVED, THE REVENUE HAS PREFERRED THIS APPEAL BEFORE US. THE LD. D.R. VEHEMENTLY SUPPORT ED THE ORDER OF THE ASSESSING OFFICER. 9 . THE LD. A.R. OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AS WELL AS PLAC ED RELIANCE UPON THE FOLLOWING CASES: - (1) J ITENDRA CHANDRALA L NAVLANI & ANS. VS UNION OF INDIA WP - 1069 OF 2016/BOMBAY , ORDER DATED 08.06.2016. (2) SARASWATI INDUSTRIAL SYNDICTE VS CIT, HARYANA, HIMACHAL PRADESH, DELHI, CIVIL APPEAL NO.91 OF 1976/SC ORDER DATED 04.09.1990 . (3) ACIT VS. DIMENSION APPARELS PVT. LTD. - ITA NO.571 TO 576/DEL/2012 ORDER DATED 21.06.2013 . (4) CIT VS. DIMENSION A P PARELS PVT. LTD. ITA NO.327 TO 330 AND 332/2014, DELHI HIGH COURT ORDER DATED 08.07.2014 . ITA NO.584/LKW/2016 PAGE 9 OF 10 (5) MARUTI SU ZUKI INDIS LTD. VS. DY. CIT ITA NO.288/DEL/2016, ITAT DELHI ORDER DATED 21/7/2016. 10 . THE LD. A.R. OF THE ASSESSEE , RELYING UPON THE AFORESAID CASE LAWS , SUBMITTED THAT AMALGAMATING COMPANY CEASES TO EXIST IN THE EYES OF LAW ONCE AMALGAMATION IS MADE EFFECTIVE . WHEN TWO COMPANIES AMALGAMATED AND MERGED INTO ONE, THE TRANSFEREE COMPANY LOSES ITS ENTITY AND IT CEASES TO HAVE ITS BUSINESS. THEIR RESPECTIVE RIGHTS AND LIABILITIES ARE DETERMINED UNDER THE SCHEME OF AMALGAMATION BUT THE CORPORATE ENTITY OF THE TRAN SFEREE COMPANY CEASES TO EXIST WITH EFFECT FROM THE DATE OF AMALGAMATION MADE EFFECTIVE. 11 . WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE CASE RECORD AND HAVE CONSIDERED THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US. ON THE ISSUE OF AMALGAMATION OF COMPANI ES, THE LEGAL POSITION IS CLEAR AS TO THE FACT THAT AMALGAMATION IS BLENDING OF TWO OR MORE EXISTING UNDERTAKINGS INTO ONE UNDERTAKING AND THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHARE HOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKINGS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER OF ONE OR MORE UNDERTAKINGS TO AN EXISTING COMPANY. THE AMALGAMATION DOES NOT COVER THE MERE ACQUISITION BY A COMPA NY OF THE SHARE CAPITAL OF OTHER COMPANY WHICH REMAINS IN EXISTENCE AND CONTINUES ITS UNDERTAKING BUT THE CONTEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISITION . TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THER E MAY BE ABSORPTION OR BLENDING OF ONE BY THE OTHER, BOTH AMOUNTS TO AMALGAMATION. WHEN TWO COMPANIES ARE MERGED AND ARE JOINED, SO AS TO FORM A THIRD COMPANY OR ONE IS ABSORBED INTO ONE OR BLENDED WITH ANOTHER, THE AMALGAMATING COMPANY LOSES ITS ENTITY . IN THE PRESENT ITA NO.584/LKW/2016 PAGE 10 OF 10 CASE IT IS SEEN THAT M/S CHANDAK HOUSING PVT. LTD. HAS AMALGAMATED WITH M/S CHANDAK BUILDERS & DEVELOPERS PVT. LTD. W.E.F. 1/4/2012 BY THE DIRECTION OF THE HON'BLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 6/11/2012. WE ARE OF THE CONSIDER ED VIEW THAT ONCE THE COMPANY IS AMALGAMATED WITH ANOTHER COMPANY, IT LOSES ITS EXISTENCE FROM THE EFFECTIVE DATE AND THE ASSESSING OFFICER CANNOT TAKE ACTION UNDER SECTION 147/148 OF THE ACT IN THE CASE OF THE ASSESSEE BEING NON - EXISTENT FROM THE EFFECTIV E DATE AND FURTHER NO CONSEQUENTIAL ASSESSMENT CAN BE MADE UNDER SECTION 143(3) OF THE ACT. WE , THEREFORE, FIND NO INFIRMITY WITH THE FINDINGS OF THE LD. CIT(A) AND THE ORDER OF THE LD. CIT(A) DECLARING THE ACTION TAKEN BY THE DEPARTMENT UNDER SECTION 147 /148/143(3) OF THE ACT AS VOID AB - INITIO , IS SUSTAINED. 12 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 / 01 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9 TH JANUARY , 201 8 JJ: 0801 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR
