DCIT, New Delhi V. M/s. Satwant Export Pvt. Ltd., New Delhi

ITA 5963/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6372 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 07-02-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Validity of assessment
• Section: 69

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL, NEW DELHI BENCHES, NEW DELHI G BENCH BEFOR SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5963 TO 5968/DEL/2013 A.YRS. 2003-04 TO 2008-09 DCIT, CENTRAL CIRCLE -21, ROOM NO. 344, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI -55 VS. M/S SATWANT EXPORTS PVT. LTD., (AMALGAMATED WITH JPL HOTEL & RESIDENCES PVT. LTD.), D-7/7474, VASANT KUNJ, NEW DELHI (PAN: AAHCS8530R) REVENUE BY : SHRI S.S. RANA, CIT(DR) ASSESSEE BY: SHRI B.K. DHINGRA, CA DATEOF HEARING : 24-03-2017 DATEOF PRONOUNCEME NT: 29-03-2017 ORDER PER BENCH THESE APPEALS OF THE DEPARTMENT ARE DIRECTED AGAINST T HE SEPARATE ORDERS EACH DATED 19.8.2013 FOR THE A.YRS. 2003-04 & 2004-05 AND DATED 20.8.2013 FOR THE A.YRS. 2005-06 TO 2008-09 OF THE LD. CIT(A)-II, NEW DELHI. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE SI MILAR HAVING IDENTICAL FACTS, THEREFORE, THE APPEALS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BR EVITY. 2. FIRST WE DEAL WITH ITA NO. 5963/DEL/2013 FOR AY 2 003-04 WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED. 2 I) THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS. 499006/- ON ACCOUNT OF DISALLOWANCE OF 100% EXPENDI TURE. II) THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 3201856/- ON ACCOUNT OF UNEXPLAINED PURCHASE U/S. 69 C OF THE ACT. 3(A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE H EARING OF THE APPEAL. 2.1 IN ALL OTHER APPEALS, IDENTICAL ISSUES ARE INVOLVE D AND SIMILAR GROUNDS HAVE BEEN RAISED, THE ONLY DIFFERENCE IS IN THE FIGURE S INVOLVED. 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR T HE ASSESSEE, AT THE VERY OUTSET STATED THAT ON THE SIMILAR ISSUES THE APPEALS OF THE ASSESSEE WERE ALLOWED BY THE ITAT VIDE ORDER DATED 11.4.2014 PASSED IN ITA NO. 5340 TO 5345/DEL/2013 FOR THE ASSESSMENT YEARS 2003-04 T O 2008-09 WHEREIN, VIDE AFORESAID ORDER THE ASSESSMENTS WE RE QUASHED. IT WAS FURTHER SUBMITTED THAT THE SAID ORDER OF THE ITAT HAS BEEN AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT. LD. A.R. OF T HE ASSESSEE HAS FILED A SMALL PAPER BOOK CONTAINING PAGES 1 TO 36 ENCLOSING THE REWITH THE COPY OF THE AFORESAID ORDERS FOR RECORD. 4. IN HIS RIVAL SUBMISSIONS, THE LD. CIT (DR) ALTHOUGH SUPPORTED THE ORDER OF THE AO, BUT COULD NOT CONTROVERT THE AFORESAI D CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE PRESENT CASE, IT IS 3 NOTICED THAT THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER F OR THE ASSESSMENT YEARS 2003-04 TO 2008-09 WERE HELD TO BE NULL ITY VIDE THE ORDER DATED 11.4.2014 BY THIS BENCH OF THE ITAT IN ITA NO. 5340 TO 5345/DEL/2013 AND RELEVANT FINDING HAS BEEN GIVEN VIDE PARA NO. 11 & 12 OF THE SAID ORDER DATED 11.4.2014 WHICH READ AS UNDER: - 11. IF THE TOTALITY OF THE FACTS ARE SUMMARIZED IT CAN BE SAID THAT A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JURISTIC PERSON AND IT TAKES ITS BIR TH AND GETS LIFE WITH ITS INCORPORATION. IT DIES WITH THE DISSOLUTION AS PER THE PROVISIONS OF THE COMPANIES ACT. IT IS A TRITE LAW THAT ON AMALGAMATION, THE AMALGAMATIN G COMPANY CEASES TO EXIST IN THE EYES OF LAW. HAVING REGARD THIS CONSEQUENCE PROVIDED IN LAW, A NUMBER OF CASES THE HONBLE APEX COURT HELD THAT ASSESSMENT UPON A DISSOLVED COMPANY IS IMPERMISSIBLE AS THERE IS NO PROVISION IN THE I.T. ACT TO MAKE AN ASSESSMENT UPON A NON-EXISTENT COMPANY. IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT (186 ITR 278), THE L EGAL POSITION WAS EXPLAINED. IN AMALGAMATION TWO OR MOR E COMPANIES ARE FUSED INTO ONE BY MERGER OR BY TAKING OV ER BY ANOTHER. THE AMALGAMATION IS A BLENDING OF TWO OR MORE EXISTING UNDERTAKING 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 BLENDING UNDERTAKINGS. THEREFORE, NO ASSESSMENT CAN BE FRAMED ON A NON-EXISTENT ENTITY. IDENTICAL VIEW WAS EXPRESSED BY HONBLE HIGH COURT OF CALCULTTA IN INK AGENCIES P LTD. VS. CWT (2012) 20 4 TAXMAN.COM 731 (CAL.), WHEREIN NOTICE WAS ISSUED UPON A COMPANY WHICH WAS NOT IN EXISTENCE AT THE TIME OF ISSUANCE OF NOTICE DUE TO ITS WINDING UP. IT WAS HELD TH AT TRANSFEROR COMPANY WOULD NO LONGER BE AMENABLE TO ASSESSMENT PROCEEDINGS. LIKEWISE, HONBLE GUJARAT HIGH COURT (SCA NO. 5857 OF 2004) ORDER DATED 15.1.2013 ON THE ISSUE OF VALIDITY OF ASSESSMENT ON A NON EXISTENT PERSON HELD THE SAME A NULLITY. 12. IN VIEW OF THE CLEAR FACTUAL POSITION AND JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE, ALL THESE APPEALS OF THE ASSESSEE ARE ALLOWED. 6. THE AFORESAID ORDER OF THE ITAT HAS BEEN AFFIRME D BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS ORDER DATED 26.11.20 14 IN ITA NOS. 725- 728/2014 FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006 -07 & 2008-09 RESPECTIVELY AND ORDER DATED 05.12.2014 IN ITA NO. 74 2/2014 FOR THE A.Y. 2007-08 BY HOLDING AS UNDER:- THIS APPEAL BY THE REVENUE HAS TO BE DISMISSED IN VIEW OF THE DECISION OF THIS COURT IN COMMISSIONER OF INCOME TAX - III VERSUS DIMENSION APPARELS PRIVATE LIMITED, ITA NO. 327/2014 AND OTHER CONNECTED APPEALS DECIDED ON 8 TH JULY, 2014. THE SAID DECISION RELIES UPON EARLIER DE CISIONS OF THE DELHI HIGH COURT IN SPICE ENTERTAINMENT LIMITE D VERSUS COMMISSIONER OF INCOME TAX, ITA NO. 475/2011 DECIDED ON 3 RD AUGUST, 2011 AND COMMISSIONER OF INCOME TAX VERSUS VIVEK MARKETING SERVICES PRIVATE LIMITED, I TA NO. 273/2009 DECIDED ON 17 TH SEPTEMBER, 2009. NOTICEABLY, THE ASSESSING OFFICER DURING THE COURSE OF THE 5 PROCEEDINGS UNDER SECTION 153A/C OF THE INCOME TAX ACT, 1961 WAS INFORMED ABOUT THE AMALGAMATION, WH ICH RESULTED IN DISSOLUTION OF THE RESPONDENT-ASSESSEE, BUT NO REMEDIAL OR EFFECTIVE STEPS WERE TAKEN. THE APPEAL IS ACCORDINGLY DISMISSED. 7. WE THEREFORE, AFTER CONSIDERING THE TOTALITY OF TH E FACTS AS DISCUSSED HEREINABOVE, ARE OF THE VIEW THAT THESE APPEALS BY T HE DEPARTMENT HAVE NOW BECOME INFRUCTUOUS, SINCE ON THE SAME ISSUE IN THE APP EALS OF THE ASSESSEE IN ITA NOS. 5340 TO 5345/DEL/2013 FOR THE A.YRS. 2003-04 TO 2008-09 THE ASSESSMENTS WERE HELD TO BE NULLITY BY THE I TAT AND THE HONBLE JURISDICTIONAL HIGH COURT HAS UPHELD THE SAID V IEW. 8. IN THE RESULT, ALL THE SIX APPEALS FILED BY THE REV ENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/03/2017. SD/- SD/- [H.S. SIDHU] [N.K. SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 29/03/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES