ACIT, CHENNAI V. Caplin Point Laboratories Ltd., CHENNAI

ITA 667/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73677 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DASGUPTA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 143(3); 14A; 115JB

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO.667/MDS/2013 ASSESSMENT YEAR: 2009-10 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI 600 034. VS. M/S. CAPLIN POINT LABORATORIES LTD., NO.3, NARBAVI, LAKSHMANAN STREET, T. NAGAR, CHENNAI 600 017. [PAN : AABCC2667F] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DASGUPTA, JCIT RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE DATE OF HEARING : 08.01.2014 DATE OF PRONOUNCEMENT : 31.01.2014 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IX, CHENNAI DA TED 27.12.2012 RELEVANT TO THE ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL, FILED HIS RETURN ADMITTING TOTAL INCOME AT ` .23,05,710/-. UNDER BOOK PROFIT METHOD, THE TAXABLE INCOME WAS ARRIVED AT ` .1,92,04,515/- UNDER SECTION 115JB OF THE INCOME TAX ACT. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT BY DETERMINING TAXABLE INCOME OF THE ASSESS EE AT ` .1,30,47,629/- I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.667 667667 667/M/ /M/ /M/ /M/13 1313 13 2 UNDER CONVENTIONAL SCHEME AND TAX PAYABLE INCLUDING INTEREST OF ` .48,34,826/- BY MAKING VARIOUS DISALLOWANCES. 3. ON APPEAL, THE LD. CIT(APPEALS) DELETED THE DIS ALLOWANCE OF ` .17,127/- MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. GROUND NO. 2 RELATES TO ADDITION UNDER SECTION 14A OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AMO UNT BEING VERY SMALL, HE IS NOT SERIOUS IN RAISING OBJECTION AGAINST THIS GROUND. THEREFORE, KEEPING IN VIEW OF THE SUBMISSION OF THE LD. COUNSEL FOR TH E ASSESSEE, THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED. 6. THE NEXT GROUND OF APPEAL RELATING TO MAT CREDI T OF AMALGAMATED COMPANY. THE ISSUE INVOLVED IN THIS APPEAL IS WHETH ER THE AMALGAMATED COMPANY IS ENTITLED TO ALLOW THE CREDIT OF ENTITLED MAT CREDIT OR NOT. ACCORDING TO THE ASSESSING OFFICER, THE PROVISIONS OF SECTION 115JA AND SECTION 115JB OF THE ACT ARE SELF CONTAINED SECTION S AND THERE IS NO PROVISION UNDER THIS SECTION TO ALLOW CREDIT OF AN AMALGAMATING ENTITY IN THE HANDS OF THE AMALGAMATED ENTITY. ACCORDINGLY, THE A SSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.667 667667 667/M/ /M/ /M/ /M/13 1313 13 3 7. ON APPEAL, THE LD. CIT(APPEALS), BY FOLLOWING T HE ITAT ORDER IN THE CASE OF M/S. RANGANATHAN INDUSTRIES PRIVATE LIMITED V. ADDL. CIT IN I.T.A. NO.2434/MDS/2004, DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. 8. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 9. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE. 11. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSEE IS THAT THE AMALGAMATION BETWEEN THE AMALGAMATING COMPANY [MALI ND LABORATORIES PVT. LTD.] AND THE AMALGAMATED COMPANY I.E. THE ASS ESSEE WAS APPROVED BY THE HONBLE MADRAS HIGH COURT VIDE ORDER DATED 25.0 9.2008 AND ON AMALGAMATION, ALL THE ASSETS AND LIABILITIES ARE VE STED WITH THE AMALGAMATED COMPANY AND THE AMALGAMATED COMPANY I.E. THE ASSESS EE ONLY CONTINUES THE BUSINESS OF THE AMALGAMATING COMPANY AND CLAIME D MAT CREDIT. HOWEVER, THE ASSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE PROVISIONS OF SECTION 115JA AND SEC TION 115JB OF THE ACT ARE SELF CONTAINED SECTIONS AND THERE IS NO PROVISION U NDER THIS SECTION TO ALLOW CREDIT OF AN AMALGAMATING ENTITY IN THE HANDS OF TH E AMALGAMATED ENTITY. ON I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.667 667667 667/M/ /M/ /M/ /M/13 1313 13 4 APPEAL, THE LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING THE DECISION OF THE ITAT IN THE CASE OF M/S. RANGANATHAN INDUSTRIES PRIVATE LIMITED V. ADDL. CIT IN I.T.A. NO.2434/MDS/ 2004 VIDE ORDER DATED 30.11.2007, IN WHICH IT HAS B EEN HELD HAS UNDER: 'UPON A CAREFUL CONSIDERATION OF THE ISSUE WE FIND THAT, AFTER AMALGAMATION THE ASSESSEE COMPANY IS ENTITLED TO AL L THE ASSETS, CLAIMS, ETC. OF THE ERSTWHILE COMPANY, WHICH IS ALS O SUPPORTED BY HON'BLE HIGH COURT ORDER IN THIS REGARD. FURTHER, W HEN THE ASSESSEE COMPANY IS NOW BEING ASSESSED IN PLACE OF ERSTWHILE COMPANY AND THE TDS CREDIT PERTAINING TO THE ERSTWH ILE COMPANY IS BEING GIVEN CREDIT TO THE ASSESSEE COMPANY, THER E IS NO REASON WHY A DIFFERENT TREATMENT SHOULD BE GIVEN TO THE MA T CREDIT AVAILABLE PERTAINING TO THE ERSTWHILE COMPANY. WE D O NOT AGREE WITH THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) THAT THERE IS NEED FOR SPECIFIC MENTION IN THIS REGARD IN SECT ION 115JAA AS THE CARRY FORWARD OF MAT CREDIT OF ERSTWHILE COMPAN Y BY AMALGAMATED COMPANY IS IN-BUILT IN THE SCHEME OF AM ALGAMATION AS WELL AS THE SCHEME OF MAT CREDIT. HENCE, WE SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) IN THIS REGARD AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESS EE. ' 12. THE LD. CIT(APPEALS), BY FOLLOWING THE ABOVE D ECISION OF THE TRIBUNAL, DIRECTED THE ASSESSING OFFICER TO ALLOW T HE CLAIM OF THE ASSESSEE. MOREOVER, THE LD. DR COULD NOT CONTROVERT THE ABOVE FINDINGS OF THE TRIBUNAL OR FILED ANY HIGHER COURTS DECISIO N TO TAKE A DIFFERENT VIEW. IN VIEW OF THE ABOVE, WE FIND NO REASON TO IN TERFERE WITH THE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE AND DI SMISS THE GROUNDS RAISED BY THE REVENUE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.667 667667 667/M/ /M/ /M/ /M/13 1313 13 5 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 31 ST OF JANUARY, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 31.01.2014 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.