Income Tax Appellate Tribunal - Bangalore
M/S Triad Resorts And Hotels (P) Ltd.,, ... vs Assessee on 12 February, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH, BANGALORE
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER
and
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
WTA Nos.37 to 42/Bang/2014
(Assessment years: 2002-03 to 2007-08)
M/s. Triad Resorts & Hotels P.Ltd.
'Aparanta', 2208, HAL III Stage,
80 Ft Road, Kodihalli,
Bangalore. ... Appellant
Vs.
Wealth-tax Officer,
Ward 12(2), Bangalore. ... Respondent
***
WTA Nos.43 to 45/Bang/2014
(Assessment years: 2004-05 to 2006-07)
M/s.Noorani Properties P.Ltd.
'Aparanta', 2208, HAL III Stage,
80 Ft Road, Kodihalli,
Bangalore. ... Appellant
Vs.
Wealth-tax Officer,
Ward 12(2), Bangalore. ... Respondent
***
WTA Nos.46 to 51/Bang/2014
(Assessment years: 2002-03 to 2007-08))
M/s.Verde Developers P.Ltd.
'Aparanta', 2208, HAL III Stage,
80 Ft Road, Kodihalli,
Bangalore. ... Appellant
Vs.
Wealth-tax Officer,
Ward 12(2), Bangalore. ... Respondent
WTA Nos.37 to 51/Bang/2014
Page 2 of 18
*****
Assessees by : Shri C.P.Ramaswamy, Advocate.
Revenue by : Shri Sanjay Kumar, CIT(DR).
Date of hearing : 19/01/2016
Date of pronouncement : 12/02/2016
O R D E R
Per BENCH :
These appeals by three assessees are directed against the respective orders of the learned Commissioner of Wealth-
tax(Appeals) [CWT(A)] for the assessment years 2002-03 to 2007-08.
2. Since common issues are involved in all these appeals, we dispose of the same by a common and consolidated order for the sake of convenience. Facts in all the cases are similar and identical. However, facts in M/s.Triad Resorts & Hotels P.Ltd. for the assessment year 2002-03 are stated for the sake of clarity and brevity.
3. The grounds of appeal filed by the assessee-company are as under:
"1) The order of the learned Commissioner of Wealth Tax (Appeals)-III, in so far as it is prejudicial to the interests of the appellant, is against law, weight of evidence and probabilities of the case.
2) a) The learned CWT(Appeals) erred in
upholding the impugned reassessment
despite the fact that no valid notice u/s. 17 was issued and served within the statutory time limit. She ought to have annulled the assessment as done by her in the case of WTA Nos.37 to 51/Bang/2014 Page 3 of 18 the sister concern of the appellant on identical facts and circumstances.
b) The learned CWT(Appeals) failed to appreciate that there was no documentary evidence with the Assessing Officer for having issued within the statutory time limit the impugned notice u/s.17 of the Wealth Tax Act, 1957, nor was there any evidence for service of such notice. Consequently, she erred in upholding the assumption of jurisdiction u/s 17 of the Wealth Tax Act, 1957.
c) The learned CWT(Appeals) failed to appreciate that the appellant challenged the assumption of jurisdiction without issue of valid notice u/s.17 from the beginning, nor w a s t he re a ny a ccep ta n ce o f ju ri s di ctio n b y the appella n t a t a ny poi nt o f t ime.
Consequently, she erred in upholding the reopening of the impugned assessment.
3) Wi th ou t p re j udi ce to gro und N o. 2 a )
T he lea r ned CWT ( Appea ls ) e rred in
u ph oldi ng the impugned reassessment
u/s.17 of the Wealth Tax Act, 1957 despite the fact that the urban land held by the ap pellant was deemed to be sto ck in trade as on the valuation date in terms of sub-
clause (ii) of Clause (b) of Explanation 1 to section 2(ea) of the Wealth Tax Act, 1957. She ought to annulled the impugned assessment.
b) The learned CWT(Appeals) failed to appreciate that during the currency of the joint development agreement entered into by the appellant with the developer the impugned asset with regard to which wealth tax had been charged had to be deemed as stock-in-trade irrespective of the nature of book entries made by the appellant in its accounts. Consequently, she erred in upholding the assessment as valid.
c) The learned CWT(Appeals) failed to appreciate that there cannot be fiction upon fiction in the view that in the year of sale (financial year 2007-08) the impugned asset was treated as long-term capital asset in WTA Nos.37 to 51/Bang/2014 Page 4 of 18 terms of section 2(42A) of the Income-tax A c t, 1 96 1 a n d th e r e b y fo r the p u rp os e s o f t h e We a lt h T a x A ct , 1 9 5 7 a l s o t he impugned asset had to be deemed as stock-
in-trade as on the valuation date namely 31stMarch 2002. Consequently,she erred in confirming the assessment.
d) The learned CWT(Appeals) failed to appreciate that the doctrine of 'approbate and reprobate' is a species of the law of estoppel and doe s no t operate against law. It operates only against facts. Consequently, she erred in upholding the assessment as valid.
4) Without p rejudice to gro und No .3: T he lea rned CWT ( Appeals) failed to a ppreciate that in determining the fair market value as on the valuation date, the DVO did not fa ct or in the i rre vocabl e joi nt d evel opm ent ag reem ent impa cti ng t he F M V . Consequently, she erred in adopting gross FMV as determined by the DVO, without further reducing the same.
5) Forth above grounds and such other grounds that may be urged at the time of hearing the appellant prays that the appeal be allowed.
The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary. "
4. Briefly, the facts of the case are as under: The assessee is a company, incorporated under the provisions of the Companies Act, 1956 in which public are not substantially interested. It is engaged in the business of running of hotels and service apartments. Since no wealth-tax returns were filed, the Assessing Officer (AO) issued notice u/s 17 of the Wealth-tax Act, 1957 ['the Act' for short] on 21/7/2008. The assessment was WTA Nos.37 to 51/Bang/2014 Page 5 of 18 completed after adopting the Fair Market Value [FMV] of the land property situated in survey No.113/1 measuring 2 acres; survey No.113/2 measuring 1 acre 39 guntas of Patandar Agrahara, K.R.Puram Hubli, Bangalore South Taluk. The AO noticed that this land was shown as investment i.e. capital asset in the books of account regularly maintained by it. He further noticed that when this property was sold in the year 2008, profits arising out of sale of the property were offered to income-tax under the head 'capital gains' for the assessment year 2008-09. Taking into consideration these facts, the AO had issued notice proposing to re-assess the wealth which escaped tax.
5. During the course of assessment proceedings, it was contended before the AO that Joint Development Agreement [JDA)] was entered into with M/s.Classic Infrastructure Development Ltd., on 5/12/2000 for development of property and therefore, the property ceased to be a capital asset and is only stock-in-trade which is not liable to wealth-tax. The above contention of the assessee was turned down by the AO. The AO held that the assets are urban land property. Relying on the treatment given by the assessee-company in its books of account and after referring the matter to the DVO for valuation of FMV as on valuation date, DVO estimated the FMV of the property at Rs.4,83,10,245/- adopted for wealth-tax purposes.
6. Being aggrieved, an appeal was preferred before the ld.CWT(A) who, by impugned order, dismissed the appeal. It WTA Nos.37 to 51/Bang/2014 Page 6 of 18 was contended, inter alia, before the ld.CWT(A) that no notice u/s 17 of the Act was served on the assessee-company and further reiterated the same contentions as advanced before the AO that the land was held as stock-in-trade and not as an asset, therefore, out of the purview provisions of the Act. It was further contended that the deposit of Rs.11.3 crores received pursuant to JDA with M/s.Classic Infrastructure Development Ltd., should be reduced from the value adopted for wealth-tax purposes. The contentions of the assessee-company were turned down by the ld.CWT(A) by holding that the arguments of the assessee- company were contrary to the evidence on record and the treatment given in the books of account and the very fact that the assessee offered profit arising from subsequent sale of property to M/s. ITC in the assessment year 2008-09 as a capital gain goes to prove that the property in question is only a capital asset. The plea of the assessee-company that refundable deposit of Rs.11.3 crores should be reduced from the value adopted was negative by the ld.CWT(A) by holding that it is not a debt incurred in connection with acquiring the asset.
7. Being aggrieved, assessee-company is before us with the present appeals.
7.1 Learned counsel for the assessee urged before us that once the lands in question are subject matter of JDA, property should be treated only as stock-in-trade. Findings in income-tax proceedings are not relevant in the wealth-tax proceedings. He WTA Nos.37 to 51/Bang/2014 Page 7 of 18 also raised additional ground of appeal during the course of hearing of the appeal wherein he had raised the issue that once the property or lands are subject matter of JDA and the possession is given to the developer, the assessee cease to be owner of the property and therefore, while computing net wealth of the assessee, value of lands cannot be included. He further submitted that there is a substantial difference in the provisions of sec.4 of the Act w.e.f. 1/4/1993. The sum and substance of his argument is that by virtue of JDA, assessee-company ceased to be owner of the land and therefore, value of the land cannot be included while computing net wealth of the assessee. 7.2 On the other hand, ld.CIT(DR) vehemently opposed the above arguments. He filed written submissions drawing our attention to certain paragraphs of ld.CWT(A)'s order and highlighted the treatment given by assessee-company in the books of account. He further submitted that JDA does not create an AOP or a partnership between assessee-company and developer and therefore, the asset cannot be treated as stock-in- trade. Treatment given in income-tax proceedings also holds good for wealth-tax purposes.
8. We have heard rival submissions and perused the material on record. The only issue that arises in the appeals is whether the lands, which are undisputedly urban land within the meaning of provisions of 2(e)(a) of the Act, which are subject matter of JDA can be included in the net wealth of the assessee-company.
WTA Nos.37 to 51/Bang/2014 Page 8 of 18 Undisputed facts are that in the books of account, these lands were shown as investments. The lands were purchased in the year 1996 and JDA was entered for development of the property on 5/12/2000 with M/s.Classic Infrastructure Development Ltd. Subsequently JDA was cancelled and the lands were ultimately sold in the month of August 2007 to ITC Ltd. When the lands were sold, profits arising thereon were shown as capital gain, the benefit of indexation of cost acquisition was claimed and allowed in the income-tax proceedings for assessment year 2008-09. The arguments advanced on behalf of assessee-company for exclusion of these lands from net wealth of the assessee-company is primarily on two counts:
i. The lands are stock-in-trade and therefore, not liable to wealth-tax;
ii. When the lands are subject matter of JDA, possession of the lands was given to the developer, assessee-company ceased to be a owner of the property and therefore, value of the lands cannot be included in computing net wealth of the assessee-company.
8.1 We shall now first deal with first limb of the arguments, viz., whether the lands are stock-in-trade, as claimed by the assessee-company? Undisputedly, assessee-company has been showing these lands as investment in the books of account regularly maintained by it. Even in income-tax proceedings, lands were shown as capital asset and profit arising in subsequent sale of land to M/s.ITC Ltd. was shown under the head 'capital WTA Nos.37 to 51/Bang/2014 Page 9 of 18 gains' and benefit of indexation was obtained. No doubt, it is settled principle of law that the finding in income-tax proceedings is not relevant for the purpose of wealth-tax proceedings but the crucial facts to be noticed in this case is that the assessee-
company was not able to demonstrate before us that the lands were held as stock-in-trade by the assessee-company with any material. Therefore, unless contrary is proved, it is presumed that treatment given in the books of account is correct and therefore, we are unable to agree with the assessee-company that the lands are held as stock-in-trade.
9. Now, we shall advert to second limb of his argument that whether the assessee-company ceased to be a owner of the land in question once the lands are subject matter of JDA and possession of the property was handed over to the developer. Even without going into veracity of the claim, whether possession of land was given to the developer in terms of JDA, it is settled principle of law that by virtue of General Power of Attorney [GPA] does not create any interest in/or charge on such property. By virtue of JDA, the developer is only given a permission to develop the property. JDA is only a creation of agency whereby the land owners authorize the developer to do certain acts specified therein on behalf of land owners. JDA is not an instrument of transfer in regard to any right, title or interest in the immovable property. In fact, the Hon'ble Supreme Court in the case of Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana (340 ITR 1) vide WTA Nos.37 to 51/Bang/2014 Page 10 of 18 para.20 of the judgment had dealt with the scope of the Power of Attorney as follows:
"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see section 1A and section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State of Rajasthan vs. Basant Nehata - 2005 (12) SCC 77, this Court held :
"A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.
Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of- Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by WTA Nos.37 to 51/Bang/2014 Page 11 of 18 reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee."
An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor." and finally concluded that the GPA do not convey title and do not amount to transfer nor can they be recognized as a valid mode of transfer of immovable property observing as under:
"We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.
Transactions of the nature of `GPA sales' or `SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property.
They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales."
10. Even assuming that JDA is in the nature of agreement of sale, the Hon'ble Supreme Court, after referring to the provisions WTA Nos.37 to 51/Bang/2014 Page 12 of 18 of sec.54 of the Transfer of Property Act, which deals with agreement of sale, held as under:
"Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. This Court in Narandas Karsondas v. S.A. Kamtam and Anr. (1977) 3 SCC 247, observed:
A contract of sale does not of itself create any interest in, or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act. See Rambaran Prosad v. Ram Mohit Hazra [1967]1 SCR; AIR 1967 SC 744. The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Relief Act, 1963, and in Section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein."
In India, the word `transfer' is defined with reference to the word `convey'. The word `conveys' in section 5 of Transfer of Property Act is used in the wider sense of conveying ownership... ...that only on execution of conveyance ownership passes from one party to another...."
In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra [2004 (8) SCC 614] this Court held:
"Protection provided under Section 53A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed WTA Nos.37 to 51/Bang/2014 Page 13 of 18 transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party."
It is thus clear that a transfer of immoveable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred."
11. The Hon'ble jurisdictional High Court, in the case of Wipro Ltd. vs. DCIT reported in 282 CTR (Kar) 346 had dealt with the scope of Power of Attorney executed in the context of development of properties. The Hon'ble High Court, after considering the judgment of the Hon'ble Supreme Court in the case of Suraj Lamp & Industries (P) Ltd. (supra) had held that by virtue of GPA, it does not have the affect of transferring or enabling enjoyment of any immovable property. Therefore, it would not amount to transfer as envisaged within the meaning of sec.2(47)(vi) of the IT Act. The relevant paragraphs of the judgment are reproduced hereunder:
"140. Therefore, any transaction which has the effect of transferring or enabling the enjoyment of any immovable property is deemed to be a transfer under s. 2(47). The apex Court in the case of Surqj Lamp & Industries (P) Ltd. vs. State of Haryana. Special Leave Petn. No. 13917 of 2009 explaining the scope of power of attorney has held as under :
"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. A power of attorney is creation of an agency whereby the grantor authorises the grantee to do the acts specified WTA Nos.37 to 51/Bang/2014 Page 14 of 18 therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (Sec. lA and 2 of Power of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee."
141 In State of Rajasthan & Ors. vs. Basant Nahata 2005 (12) SCC 77. the Court held as follows :
"A grant of power of attorney is essentially governed by Chapter X of the Indian Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed. the same shall be read as if done by the donor. A power of attorney is as is well known, a document of convenience".
142. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed. the same shall be read as if done by the principal. A power of attorney is a document of convenience. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. It is revocable or terminable at any time unless it made irrevocable in a manner known to law.
143. Therefore even if s.2(47) is held to be applicable to a stock-in-trade, unless the transaction in question has the effect of transferring or enabling the enjoyment of any immovable property, it would not amount to a transfer.
144. In the instant case. assessee executed a power of attorney after entering into an agreement of sale for the purposes mentioned therein. It is in pursuance of the power so conferred, coupled with the terms f the agreement of sale, WTA Nos.37 to 51/Bang/2014 Page 15 of 18 the power of attorney holder has to develop the property, identify the purchasers and sell the undivided share of land as well as the built area to such purchasers. Neither in the agreement of sale nor in the power of attorney, possession of the property was given to him. Having regard to the terms of the power of attorney, the intention of the assessee was not a transfer of the right in a schedule property in favour of his agent nor was he permitted to enjoy the immovable property. Therefore, the case would not fall under s. 2(47)(vi). The assessee though executed a power of attorney, received the entire consideration under the agreement and acknowledged the same in the books of account and showed it in the balance sheet, that by itself did not confer the power of transferring the stock-in-trade in favour of the power of attorney holder or in favour of the purchasers unless he has executed the sale deed on behalf of the purchasers. Therefore, In view of s. 45(2) of the Act, the capital gains is not chargeable on receipt of the consideration in the year in which that consideration was received under s. 45(2). The income-tax is charged in the previous year in which such stock-in-trade is sold. Sale took place in the asst. yrs. 2004-05 and 2005-06. The power of attorney had been executed in asst. yr. 2001-02. When stock- in-trade is sold by executing a deed for conveyance and duly registered, the question of the said stock-in-trade king otherwise transferred would riot arise at all. Therefore, the argument of the Revenue, that on the day the power of attorney was executed when entire consideration due under the agreement of sale was received and virtue of the power of attorney, the power of attorney holder is authorized to develop the property, to sell the property and to receive the consideration, It amounts to the stock-in-trade being otherwise transferred leading to the said income being chargeable to Income-tax in the previous year in which the power of attorney is executed is without any substance. As the stock-in-trade is sold by way of a registered deed, there is no intention to avoid payment of capital gains. On receipt of such capital gains, the capital gain tax has been paid in the previous year in which the stock-in-trade was sold and therefore the order of the Tribunal as well as the order of the assessing authority is contrary to the aforesaid statutory provisions. As such, it is unsustainable in law. Accordingly, the said two are set aside. The order passed by the Tribunal is restored. "
12. Thus it is clear that JDA does not confer any title nor transfer any interest in immovable property. Furthermore, WTA Nos.37 to 51/Bang/2014 Page 16 of 18 provisions of section 4 use the expression 'belonging to an individual'. The term 'belonging' had come up for interpretation before the Hon'ble Supreme Court in the case of CWT vs. Bishwanath Chatterjee (103 ITR 536) and late Nawab Sir Mir Osman Ali Khan (162 ITR 888) wherein the Hon'ble Supreme Court held as under:
"The apex court in the case of Bishwanath Chattejee [1976] 103 ITR 536 (page 539):
"The expression 'belong' has been defined as follows in the Oxford English Dictionary :--'To be the property or rightful possession of.' So it is the property of a person, or that which is in his possession as of right, which is liable to wealth-tax. In other words, the liability to wealth- tax arises out of ownership of the asset, and not otherwise. Mere possession, or joint possession, unaccompanied by the right to, or ownership of property would therefore not bring the property within the definition of 'net wealth' for it would not then be an asset 'belonging' to the assessee."
The apex court in the case of (Late) Naivab Sir Mir Osman All Khan [1986] 162 ITR 888 has observed (page 899):
"In all these cases, as was reiterated by the Calcutta High Court in S. B. (House and Land) P. Ltd. v. CIT [1979] 119 ITR 785 the question of ownership had to be considered only in the light of the particular facts of a case. The Patna High Court in Addl. CIT v. Sahay Properties and Investment Co. P. Ltd. [1983] 144 JTR 357 was concerned with the construction of the expression 'owner' in section 22 of the Income-tax Act, 1961. There, the assessee had paid the consideration in full and had been in exclusive and absolute possession of the property, and had been empowered to dispose of or even alienate the property. The assessee had the right to get the conveyance duly registered and executed in its favour, but had not exercised that option. The assessee was not entitled to say that because of WTA Nos.37 to 51/Bang/2014 Page 17 of 18 its own default in having a deed registered in its name, the assessee was not the owner of the property. In the circumstances, it was held that the assessee must be deemed to be the owner of the property within the meaning of section 22 of the Income-tax Act, 1961, and was assessable as such on the income from the property."
Even the Hon'ble jurisdictional High Court in the case of Vysya Bank Ltd. vs. DCWT (299 ITR 335), after considering the abovementioned two Supreme Court judgments held that an asset, which was not registered and title of the property had not been passed on to the company, cannot be included in the taxable wealth of a company In light of the abovementioned legal position, we hold that the assessee-company continues to be owner of the lands and is liable to wealth-tax.
13. With regard to the claim of the assessee-company that refundable deposits received from M/s.Classic Enterprises in terms of the development agreement should be allowed as a deduction from the value of the assets computed, it is undisputed fact that refundable deposit was received subsequent to acquisition of the asset. The refundable deposit has no nexus with the acquisition of assets in question. Therefore, the claim of the assessee-company cannot be allowed.
14. In the appeals bearing WTA Nos.37, 38/Bang/2014 and WTA 46 & 47/Bang/2014, one of the grounds raised by the assessees-companies is that there was no service of notice u/s 17 of the Act. The same issue was agitated before lower authorities WTA Nos.37 to 51/Bang/2014 Page 18 of 18 also. This fact is not disputed by the revenue. Even before us, the revenue could not demonstrate from the assessment records that notice was issued and posted through registered post. In the light of this fact, we hold that there was no proper service of notice and the grounds of appeal of the assessees-companies, in this regard, are allowed.
In the result, WTA Nos.37, 38, 46 and 47/Bang/2014 are allowed and WTA Nos.39 to 42/Bang/2014, 43 to 45/Bang/2014 and 48 to 51/Bang/2014 are dismissed.
Order pronounced in the open court on this 12th day of February, 2016 sd/- sd/-
(VIJAY PAL RAO) (INTURI RAMA RAO)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Place : Bangalore
D a t e d : 12/02/2016
srinivasulu, sps
Copy to :
1 Appellant
2 Respondent
3 CIT(A)-II Bangalore
4 CIT
5 DR, ITAT, Bangalore.
6 Guard file
By order
Assistant Registrar
Income-tax Appellate Tribunal
Bangalore