Income Tax Appellate Tribunal - Chennai
Tamil Nadu State Transport Corporation ... vs Department Of Income Tax on 21 September, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
'D' BENCH, CHENNAI
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER
AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
I.T.A. No. 31/Mds/2010
(Assessment Year : 2001-02)
M/s Tamil Nadu State Transport
The Deputy Commissioner of Corporation (Kum Div. IV) Ltd.,
Income Tax, Circle I, v. Pudukottai,
Krishnaswamy Road, 27, Railway Station New Road,
Gandhi Nagar, Kumbakonam. Kumbakonam - 612 001.
PAN : AAACV2112P
(Appellant) (Respondent)
I.T.A. No. 32, 34, 35, 36 & 37/2010
(Assessment Years : 2002-03, 2003-04, 2003-04, 2004-05 and 2005-06)
M/s Tamil Nadu State Transport
The Deputy Commissioner of Corporation (Kum Div. I) Ltd. / M/s
Income Tax, Circle I, v. Tamil Nadu State Transport
Krishnaswamy Road, Corporation (Kumbakonam)
Gandhi Nagar, Kumbakonam. 27, Railway Station New Road,
Kumbakonam - 612 001.
PAN : AAACC1294K
(Appellant) (Respondent)
I.T.A. No. 33/Mds/2010
(Assessment Year : 2002-03)
M/s Tamil Nadu State Transport
The Deputy Commissioner of Corporation (Kum Div. II) Ltd.,
Income Tax, Circle I, v. Trichy,
Krishnaswamy Road, 27, Railway Station New Road,
Gandhi Nagar, Kumbakonam. Kumbakonam - 612 001.
PAN : AAACD1269K
(Appellant) (Respondent)
Appellants by : Shri Anirudh Rai, CIT-DR
Respondent by : Shri S. Sridhar, Advocate
Date of Hearing : 21.09.2011
Date of Pronouncement : 30.09.2011
2 I.T.A. Nos. 31 to 37/Mds/10
O R D E R
PER BENCH :
These appeals of the Revenue involve certain common issues and hence are disposed of through this consolidated order.
2. Before taking up grounds in each appeal, one of the issues permeates through almost all the appeals, is tackled first. The issue is regarding effective date of amalgamation of various companies involved in these appeals.
3. Facts apropos are that Government of Tamil Nadu, as a measure of restructuring various transport Corporations in Tamil Nadu, took a decision to merge three of its Corporations, mainly Tamil Nadu State Transport Corporation (Kumbakonam Division -II) Ltd., Tamil Nadu State Transport Corporation (Kumbakonam Division-III) Ltd., Tamil Nadu State Transport Corporation (Kumbakonam Division-IV) Ltd. having its registered offices at Trichirapalli, Karaikudi and Pudukottai respectively, into Tamil Nadu State Transport Corporation (Kumbakonam Division-I) Ltd. having its registered office at Kumbakonam. Pursuant to such decision, Tamil 3 I.T.A. Nos. 31 to 37/Mds/10 Nadu State Transport Corporation (Kumbakonam Division I) Ltd. and Tamil Nadu State Transport Corporation (Kumbakonam Division-II) Ltd. approved a scheme of amalgamation by a resolution passed in an Extraordinary General Meeting of its members held on 28.12.2001 and Tamil Nadu State Transport Corporation (Kumbakonam Division III) Ltd. and Tamil Nadu State Transport Corporation (Kumbakonam Division IV) Ltd. approved a scheme of amalgamation by a resolution passed in an Extraordinary General Meeting held on 29.12.2001. The draft of the proposed orders of amalgamation were published in two newspapers as required under law on 7.12.2002 inviting objections and suggestions to the said scheme. Application for approval of the scheme of amalgamation was submitted to the Department of Company Affairs on 7.10.2002. Department of Company Affairs in exercise of powers conferred to it under sub- section (1) and (2) of Section 396 of the Companies Act, 1956 passed S.O.1477(E) dated 30.12.2003 approving the amalgamation of TNSTC (Kumbakonam Division -II) Ltd., TNSTC (Kumbakonam Division -III) Ltd. and TNSTC (Kumbakonam Division -IV) Ltd. with TNSTC (Kumbakonam Division -I) Ltd. In the S.O.1477(E) dated 30.12.2003 issued by Department of Company Affairs under Ministry of Finance, Government of India, it was mentioned at sub-clause (2) 4 I.T.A. Nos. 31 to 37/Mds/10 of clause 1 that the said order was to come to effect from the date of publication in the Official Gazette. In the Definition clause 2 also it was mentioned that "appointed day" meant, the day on which order was to be notified in Official Gazette, viz. 30th December, 2003. At clause 4 of the said order, it was mentioned that entire business and undertaking of the TNSTC (Kumbakonam Division -II) Ltd., TNSTC (Kumbakonam Division -III) Ltd. and TNSTC (Kumbakonam Division
-IV) Ltd. was to vest in the resulting company, namely, TNSTC (Kumbakonam Division -I) Ltd. However, sub-clause (ii) of clause 4 gave a specific direction with regard to the accounting of the amalgamation and this sub-clause is reproduced as under:-
"(ii) For accounting purposes, the amalgamation shall be effected with reference to the audited accounts and balance sheets as on the 31st March, 2001 of the said companies and the transactions thereafter shall be pooled into a common account.
The dissolved companies shall not be required to prepare its final accounts as on any later date and the resulting company shall take over all assets and liabilities according to the balance sheet as on 31.03.2001 of the dissolved companies and accept full responsibility for all transactions thereafter. Explanation - The undertaking of the dissolved companies shall include Development Rebate Reserve, if any, all rights, powers, authorities and privileges and all property, movable or immovable, including cash balances, reserves, revenue balances, investment, all other interests and rights in or arising out of such property as may belong to, or be in the possession of the dissolved companies, immediately before the appointed day, and 5 I.T.A. Nos. 31 to 37/Mds/10 all books, accounts and documents relating thereto and also all debts, liabilities, duties and obligations of whatever kind then existing of the dissolved companies."
At clause 8 it was specifically mentioned that all taxes in respect of profits and gains, including accumulated losses and unabsorbed depreciation, of the business carried out by the dissolved companies before the appointed day would be payable by the resulting company. Certain other provisions were also there regarding employment of the officers, position of directors, merger of Provident Fund and other benefits, etc. Though for accounting purposes, as mentioned above, the date of amalgamation was to be taken as 31st March, even for subsequent years, it seems TNSTC (Kumbakonam Division -II) Ltd., TNSTC (Kumbakonam Division -III) Ltd. and TNSTC (Kumbakonam Division -IV) Ltd. were filing their returns of their income. However, from assessment year 2004-05, return of the amalgamating company, namely, TNSTC (Kumbakonam Division -I) Ltd., reflected the amalgamated position. It is to be noted that the said TNSTC (Kumbakonam Division -I) Ltd. had not filed any consolidated return for the intervening years. Nevertheless, during the course of assessments, it was argued by the amalgamating companies that the amalgamation having come into effect on 31st March, 2001, in view of the decision of Hon'ble Apex Court in the case of Marshall Sons And 6 I.T.A. Nos. 31 to 37/Mds/10 Co. (India) Ltd. v. ITO (223 ITR 809), no assessment could be done on such companies after the date of amalgamation. However, Assessing Officer was not appreciative of this contention and he rejected this claim of the amalgamating companies and proceeded with their assessments making certain additions to the returned income. Concerned companies moved in appeal before the CIT(Appeals) on this issue as well as on certain other additions/disallowances made and CIT(Appeals) relying on the decision of Marshall Sons And Co. (India) Ltd. (supra) held that the date of amalgamation had to be considered as 31.3.2001 and therefore, assessment orders passed on the amalgamating companies for years subsequent to 31.3.2001 were null and void.
4. Since the above issue has a bearing on almost all the appeals now before us, learned D.R. started his arguments on this. Reading from S.O. 1477(E) dated 30.12.2003, learned D.R. strongly submitted that the appointed date was the date of publication in the Official Gazette which admittedly was on 30.12.2003. According to him, the amalgamation came into effect on the appointed day which was 30.12.2003 and therefore, the Department was well within its powers to make assessments for all the intervening years upto assessment 7 I.T.A. Nos. 31 to 37/Mds/10 year including 2003-04 on the amalgamating companies. Learned D.R. submitted that it was only for accounting purposes, the amalgamation date was to be considered as 31st March, 2001, but, in respect of taxation it was clearly stipulated that before the appointed date, dissolved companies were liable. Therefore, according to him, ld. CIT(Appeals) fell in error in deciding this issue in favour of assessee, especially, when the amalgamated company, namely, TNSTC (Kumbakonam Division -I) Ltd. had not filed a return of income based on the consolidated accounts, during the intervening periods.
5. Per contra, learned A.R. submitted that the decision of ld. CIT(Appeals) for assessment year 2003-04 in respect of TNSTC (Kumbakonam Division -II) Ltd. in favour of the assessee was accepted by the Department and for arriving at this decision, ld. CIT(Appeals) had relied on the decision of Hon'ble Apex Court in the case of Marshall Sons And Co. (India) Ltd. (supra). Hon'ble Apex Court in this decision had held that the date of effect of approval of a scheme of amalgamation would be the date of amalgamation as provided in the scheme and not as the date of approval of such amalgamation by a company court.
8 I.T.A. Nos. 31 to 37/Mds/10
6. We have perused the relevant orders of A.O. as well as CIT(Appeals) and also heard the rival submissions carefully. There is no dispute that TNSTC (Kumbakonam Division -II) Ltd., TNSTC (Kumbakonam Division -III) Ltd. and TNSTC (Kumbakonam Division
-IV) Ltd. had decided to amalgamate with TNSTC (Kumbakonam Division-I) Ltd. and the scheme of amalgamation was approved by resolutions passed in Extraordinary General meetings of its members held on 28.12.2001 and 29.12.2001 respectively. It is also not disputed that publication was effected for such scheme of amalgamation in two newspapers on 7.10.2002. Nevertheless, the order approving the amalgamation of the said companies was passed by the Department of Company Affairs only on 30th December, 2003 vide S.O. 1477(E). The course of events leading to such order has been clearly narrated in the preamble to such order. It is acknowledged therein that the scheme of amalgamation was approved in resolutions passed on 28.12.2001 and 29.12.2001 in Extraordinary General meetings of the concerned companies. Of course, it is mentioned that the appointed day on which the order was to come into force was the date of notification of the order in Official Gazette, which happened to be 30th December, 2003. The question 9 I.T.A. Nos. 31 to 37/Mds/10 is whether the amalgamation can be deemed to have been effected on 31.3.2001 or only on 30.12.2003. There is a specific mention in clause 4(ii) of the order, which has been reproduced at para 3 above, that after 31st March, 2001, the transactions of all the companies had to be pooled into a common account and the dissolved companies were not required to prepare any final accounts for any later date. The terminology used in the said clause is very clear and unambiguous. When the notification itself was dated 30th December, 2003 and when such notification contained therein a direction to pool the transactions in a common account after 31st March, 2001, in our opinion, it is a clear evidence that the notification related back to the date of scheme of amalgamation as passed by the Extraordinary General meetings of the respective companies or at the latest 31st March, 2001 being the date stipulated at clause 4(ii) of the order. In the case of Marshall Sons And Co. (India) Ltd. (supra), Hon'ble Apex Court was considering the date of amalgamation where a scheme of amalgamation was put for approval before the company court. It was clearly held by Hon'ble Apex Court that the amalgamation had to be deemed to have been taken place as per the date specified in the scheme of amalgamation, though sanction by the company court was received at a later date and though the scheme of amalgamation was 10 I.T.A. Nos. 31 to 37/Mds/10 notified by the Registrar of Companies after such day. Hon'ble Apex Court held that in such an eventuality, when there was significant gap between these two dates, the assessments for the intervening period were supposed to be made and could always be made on the transferee company on the income of both transferee and transferred companies and even a best of judgement assessment could be resorted to if no consolidated returns were filed. On the argument taken by the Revenue that if the scheme of amalgamation was not sanctioned by the company court, the Revenue would be left in lurch, Hon'ble Apex Court made an observation that a separate protective assessment could be made on the transferred companies also. Though in given instance here, the scheme of amalgamation was to be sanctioned by the Central Government and not by company court, this was only due to the changes in Companies Act, 1956, over a period of time, resulting in shifting of certain powers. Hence, in our opinion, the question of necessity of a protective assessment, in the cases before us was absent, since the concerned amalgamating companies had pointed out to the Assessing Officer that the amalgamation stood approved during the course of the respective assessment proceedings. By virtue of Hon'ble Apex Court in the case of Marshall Sons And Co. (India) Ltd. (supra), the approval of 11 I.T.A. Nos. 31 to 37/Mds/10 the scheme of amalgamation relates back to the date mentioned in the amalgamation scheme. Hence, we are of the opinion that after 31st March, 2001, there could not have been any assessment done on the amalgamating companies and such assessment wherever held to be null and void by the CIT(Appeals), appeals cannot be faulted.
7. Now that the basic issue permeating through various assessments assailed by the Department has been settled by us, each of the appeal is separately taken up for disposal. I.T.A. No. 31/Mds/2010
8. This appeal of the Revenue pertains to a period prior to the date of amalgamation and the only issue raised assails the direction of CIT(Appeals) allowing relief to the assessee on contribution of ` 55,62,813/- made to the Pension Fund and Provident Fund. As per the Revenue, this direction was given without verifying the correctness of figures involved.
9. During the course of assessment, it was noted by the A.O. that assessee had made a contribution to Pension Fund and Provident Fund ` 1,76,33,016/-. Out of this, as per the A.O., ` 1,74,68,183/- 12 I.T.A. Nos. 31 to 37/Mds/10 was contribution to Pension Fund and ` 1,64,833/- was contribution to Provident Fund. The A.O. came to a conclusion that contribution was not made to any recognized or approved funds and therefore, made a disallowance of full amount of ` 1,76,33,016/-. In its appeal before CIT(Appeals), argument of the assessee was that out of the amount ` 1,76,33,016/-, ` 55,62,813/- was contribution made to the Regional Provident Fund Commissioner and this being a recognized Provident Fund, the disallowance was not warranted. Ld. CIT(Appeals) appreciated this contention of the assessee and deleted the disallowance to the extent ` 55,62,813/-.
10. Now before us, learned D.R., assailing the order of ld. CIT(Appeals), submitted that ld. CIT(Appeals) had allowed the claim of the assessee without making a proper verification and without giving a chance to the Assessing Officer to verify the claim of the assessee, especially, since the Assessing Officer had given a finding that the contribution to Provident Fund out of the total sum of ` 1,76,33,016/-, came to ` 1,64,833/- only.
11. Per contra, learned A.R. submitted that no purpose would be served if the issue is remitted back to the Assessing Officer since 13 I.T.A. Nos. 31 to 37/Mds/10 what was allowed by the CIT(Appeals) was contribution made to a recognized Provident Fund.
12. We have perused the orders and heard the rival contentions. There is no dispute that A.O. in the assessment order has mentioned ` 1,74,33,183/- as contribution towards Pension Fund and ` 1,64,833/- as contribution towards Provident Fund. Against this, claim of the assessee before CIT(Appeals), was that a sum of ` 55,62,813/- was contributed to recognized Provident Fund Commissioner and this was accepted. Since the amount varies, we are of the opinion that the matter requires a re-visit by the Assessing Officer. No doubt, contribution to Regional Provident Fund Commissioner being a recognized one, has to be allowed by the Assessing Officer. Nevertheless, the amount needs verification due to variance as mentioned above. Hence, we set aside the order of ld. CIT(Appeals) and remit the issue back to the file of the A.O. for verification of the correct amount and giving allowance thereof.
13. In the result, the appeal filed by the Revenue for assessment year 2001-02 is allowed for statistical purposes. 14 I.T.A. Nos. 31 to 37/Mds/10 I.T.A. No. 32/Mds/2010
14. Grounds raised by the Revenue in this appeal for assessment year 2002-03 are reproduced hereunder:-
"(2) The CIT(Appeals) has erred on the facts and circumstances of the case in deciding that the 'appointed date for amalgamation of companies' is 31/3/2001 whereas as per the definition given in the approval order of Central Government appointed date means the date on which order is notified in the official gazette, ie., 30/12/2003.
Therefore, amalgamation is effective from Asst. year 2004-05 and not from Asst. year 2001-02.
(3) On the facts and circumstances of the case, the CIT(Appeals) has erred in annulling the assessment order passed by the Assessing Officer in this case without a reasonable cause.
(4) On the facts and circumstances of the case, the CIT(Appeals) has erred in deleting the additions made by the Assessing Officer on account of Pension Fund, Provident und (` 4,67,04,630), No faulty liability (` 6,08,75,424) and Prior period expenses (` 32,87,127) without examining these issues on merits."
15. Assessee here is TNSTC (Kumbakonam Division-I) Ltd., the company into which three other companies had amalgamated and assessment year involved is 2002-03. It had filed return for the impugned assessment year declaring income of ` 3,51,50,327/-. After setting off brought forward losses of earlier years, the total returned loss came to ` 17,06,01,268/-. After claiming brought 15 I.T.A. Nos. 31 to 37/Mds/10 forward unabsorbed depreciation, the net loss declared to be carried forward came to ` 77,99,84,426/-. Initially the assessment was completed under Section 143(3) of Income-tax Act, 1961 (in short "the Act"), but, later reopened for various reasons including non calculation of book-profit under Section 115JB of the Act. During the course of re-assessment proceedings, assessee brought to the notice of A.O. that TNSTC (Kumbakonam Division -II) Ltd., TNSTC (Kumbakonam Division -III) Ltd. and TNSTC (Kumbakonam Division
-IV) Ltd. had amalgamated with assessee-company on 31.3.2001 vide S.O. 1477(E) dated 30.12.2003 and the return filed by the assessee-company being prior to date of S.O. 1477(E), included only the transaction of the amalgamated company without considering the scheme of amalgamation and transactions of the amalgamating companies. Hence, prayer of the assessee was that there could not be valid assessment done on an income declared on the basis of part transactions. But, the A.O. was not appreciative of this contention. According to him, the amalgamation could be deemed to have come into effect only from assessment year 2004-05 and therefore, assessment could be made based on the return filed by the assessee for the impugned assessment year. Certain additions were made and assessment was completed.
16 I.T.A. Nos. 31 to 37/Mds/10
16. Assessee moved in appeal before CIT(Appeals) and its argument was that by virtue of the decision of Hon'ble Apex Court in the case of Marshall Sons And Co. (India) Ltd. (supra), the amalgamation had come into effect on 31.3.2001 and therefore, there could not be any separate assessment based on accounts of the amalgamated company without considering the accounts of the amalgamating companies. Ld. CIT(Appeals) was appreciative of this contention. According to him, the assessment done was null and void since assessee ceased to exist on 31.3.2001. But, nevertheless, he gave freedom to A.O. to frame a fresh assessment on the amalgamated company for the impugned assessment year after consolidating the accounts of all the four companies including that of the amalgamating companies.
17. Now before us, learned D.R. submitted that assessee here was the amalgamated company and not the amalgamating companies and hence, according to him, assessment done on such company cannot be held as void.
18. Per contra, learned A.R. supported the order of ld. CIT(Appeals).
17 I.T.A. Nos. 31 to 37/Mds/10
19. We have perused the orders and heard the rival contentions. As already mentioned, assessee here is Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. As per S.O. 1477(E) dated 30th December, 2003, Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. is the company into which the other three companies were to be amalgamated. In other words, there is no question of Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. having become extinct or having become dissolved at any point of time. This company was always in existence and continuing. The other companies, namely, Tamil Nadu State Transport Corporation (Kumbakonam Division -II) Ltd., Tamil Nadu State Transport Corporation (Kumbakonam Division -III) Ltd. and Tamil Nadu State Transport Corporation (Kumbakonam Division
-IV) Ltd. had amalgamated into the assessee-company. Hence, we cannot hold that the Assessing Officer had no authority to make assessment on the assessee-company based on the return filed by it. Nevertheless, it is also true that the amalgamation having come into effect on 30.12.2001, return filed by the assessee-company, excluding transactions relating to the amalgamating companies was not true and correct and did not reflect the correct state of affairs or 18 I.T.A. Nos. 31 to 37/Mds/10 income. But, assessee could not be faulted with for such an action, since the notification approving the amalgamation had come in the gazette after filing the return of income. In our opinion, in such a scenario, what is required is to set aside the order of the A.O. for the impugned assessment for making a fresh assessment, of the assessee including the transactions of the amalgamating companies also. As already mentioned at para 16 above, Assessing Officer is free to even to make best of judgement in such a scenario, where the assessee is not giving all the information relating to the amalgamated position. In our opinion, ld. CIT(Appeals) fell in error in deciding that assessment itself was null and void. We, therefore, set aside the order of ld. CIT(Appeals) as well as A.O. and remit the issue back to the file of the A.O., for de novo consideration after taking into account the amalgamated position viz. all the transactions relating to amalgamating companies as well as the assessee-company. Assessee shall co-operate with the A.O. and give all necessary records required for the purpose. Since the matter is set aside for de novo consideration, Assessing Officer will also examine various additions made by him in the original assessment after considering the higher appellate decisions, if any, on such issues. Assessee shall 19 I.T.A. Nos. 31 to 37/Mds/10 also be free to bring to the notice of the Assessing Officer all related facts pertaining to such additions and disallowances.
20. In the result, appeal of the Revenue for assessment year 2002- 03 is allowed for statistical purposes.
I.T.A. No. 33/Mds/2010
21. The assessee involved in this appeal is one of the amalgamating companies. Ld. CIT(Appeals) took a view that amalgamation having taken effect on 31.3.2001, no assessment could have been framed on the assessee for impugned assessment year. For reasons cited by us at para 6 above, we are of the opinion that ld. CIT(Appeals) is justified in taking this view. It is to be noted that the CIT(Appeals) had given freedom to the Assessing Officer to decide on merits of the case when he was considering the assessment of amalgamated company for the impugned assessment year. We, therefore, find no reason to interfere with the order of ld. CIT(Appeals).
22. In the result, appeal of the Revenue is dismissed. 20 I.T.A. Nos. 31 to 37/Mds/10 I.T.A. No. 34/Mds/2010
23. Assessee here is the amalgamated company, namely, Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. and assessment year involved is 2003-04. Assessee had filed a revised return for the impugned assessment year, including the income/loss of amalgamating companies, Tamil Nadu State Transport Corporation (Kumbakonam Division -II) Ltd., Tamil Nadu State Transport Corporation (Kumbakonam Division -III) Ltd. and Tamil Nadu State Transport Corporation (Kumbakonam Division -IV) Ltd. In the original return filed by the assessee on 20.11.2003, the effect of the amalgamation was not given since the notification of scheme of amalgamation came only on 30.12.2003. However, in the revised return filed on 27.3.2006, assessee considered the consolidated position including the transactions relating to amalgamating companies. In such return of income, assessee also claimed set off of losses brought forward from the three amalgamating companies, as also its own. The result was that the net income shown in the revised return as 'nil'. However, substantial amount of carried forward of losses and unabsorbed depreciation were claimed. Revised return having been filed late, A.O. was not inclined to allow the claim of carry forward. The A.O. also found 21 I.T.A. Nos. 31 to 37/Mds/10 that even otherwise, assessee could not claim such carry forward of losses and unabsorbed depreciation belonging to amalgamating companies since assessee was not an industrial company. Assessee was put on notice in this regard, whereupon its reply was it was an industrial company and it had done bus-body construction, reconditioning and assembly of vehicles, etc. However, the A.O. was of the opinion that date of amalgamation could be considered as 30.12.2003, and thus effective from assessment year 2004-05. Therefore, according to him, for the impugned assessment year, there could not be any assessment on consolidated results including that of amalgamating companies. Further, as per the A.O., the claim of brought forward losses and unabsorbed depreciation of amalgamating companies could not be allowed since assessee was not an industrial undertaking. As per the A.O., assessee was not mainly engaged in any industrial activity. Nevertheless, the A.O. did an assessment on protective basis on the assessee, since he had apprehension that assessment done on the assessee based on its original return might not be accepted by the appellate authorities. However, in such protective assessment, claim for set off of brought forward loss and unabsorbed depreciation was not allowed. 22 I.T.A. Nos. 31 to 37/Mds/10
24. In its appeal before ld. CIT(Appeals), assessee assailed the non-consideration of brought forward losses and unabsorbed depreciation, as also non-consideration of the results of amalgamating companies. Ld. CIT(Appeals) held that the assessment, on the assessee was correctly done since assessee was the company to which amalgamating companies had amalgamated and was always in existence. The CIT(Appeals) also did not accept the claim of the assessee for carry forward and set off of losses and unabsorbed depreciation.
25. Now before us, the only grievance of the Revenue is that ld. CIT(Appeals) held in his order that effective date of amalgamation was 31.3.2001 and not as 30.12.2003.
26. We have already held at para six above, that the scheme of amalgamation would relate back to 31.3.2001. Therefore, this grievance of the Revenue does not hold any merit. Further, appeal of the assessee having been dismissed by the CIT(Appeals), we are of the opinion that the appeal filed before us by the Revenue itself is misconceived.
23 I.T.A. Nos. 31 to 37/Mds/10
27. In the result, the appeal filed by the Revenue for assessment year 2003-04 is dismissed.
I.T.A. No. 35/Mds/2010
28. Assessee involved in this appeal is Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. to which three of the other companies had amalgamated. The appeal now filed emanates from the original assessment done by the A.O. for the impugned assessment year. Assessee had originally returned its income without considering the transactions relating to the amalgamating companies or in other words, without considering the accounts of the amalgamating companies, since as on the date it filed the original return, the notification regarding the scheme of amalgamation, had not yet come. Such return filed was initially processed under Section 143(1) of the Act. But, later it was reopened for a reason that there was escapement of income. In reply to reopening notice, assessee submitted that it had later filed revised return for the impugned assessment year, including therein the transactions relating to amalgamating companies as well, since during the interregnum, it had received notification accepting the scheme of amalgamation. Nevertheless, the A.O. was of the opinion that the date of 24 I.T.A. Nos. 31 to 37/Mds/10 amalgamation could only be considered as date of notification and proceeded with assessment making certain additions / disallowances.
29. Assessee in its appeal before ld. CIT(Appeals) submitted that date of amalgamation should be considered only as 31.3.2001 and not the date of notification and therefore, the assessment done on the assessee-company based on the original return, wherein only transaction relating to Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. was reflected, was bad in law, especially since it had filed a revised return consolidating all the four companies accounts. Ld. CIT(Appeals) after verifying the submission of the assessee, was of the view that assessment done on the assessee-company considering the transaction relating to Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. alone was wrong and incomplete and Assessing Officer ought have taken the results of the amalgamated company in a consolidated manner after considering all the amalgamating companies. Though he held assessment to be null and void, he gave freedom to the Assessing Officer to proceed with assessment after considering the consolidated accounts of the amalgamated company including that of amalgamating companies.
25 I.T.A. Nos. 31 to 37/Mds/10
30. Now before us, grievance of the Revenue is that the date of amalgamation ought have been considered as 31.3.2001 and not 30.12.2003. As per the Revenue, ld. CIT(Appeals) had erred in deleting the additions made by the A.O.
31. We have perused the orders and heard the rival contentions. We have already held at para 6 above, that date of amalgamation has to be considered as 31.3.2001 and thereafter there can be no assessment separately done on the amalgamating companies. At the same time we find that assessee here is Tamil Nadu State Transport Corporation (Kumbakonam Division -I) Ltd. which is the company into which other three companies amalgamated, or in other words, assessee-company was always continued to exist. Nevertheless, the assessee-company in its original return did not include the results of amalgamating companies since notification was not available to it when it filed such return. However, it had filed a revised return including the results of the amalgamating companies and separate assessment was made by the Assessing Officer based on such revised return. Appeal relating to such assessment has been disposed of by us in I.T.A. No.34/Mds/2010 vide para 26 above. Since the Assessing Officer has been given freedom by ld. 26 I.T.A. Nos. 31 to 37/Mds/10 CIT(Appeals) to consider all allowances and additions at the time of assessment, considering the results of all the four consolidated companies together, we do not find any infirmity in the direction given by the CIT(Appeals). We thus find no merit in the appeal filed by the Revenue.
32. In the result, the appeal filed by the Revenue for assessment year 2003-04 stands dismissed.
I.T.A. No. 36/Mds/2010
33. The sole issue raised by the Revenue in this appeal for assessment year 2004-05 is that ld. CIT(Appeals) considered the appointed date of amalgamation of companies as 31.3.2001 against 30.12.2003 considered by the A.O.
34. We have already considered this issue and held in favour of assessee at para six above of this order. Hence, for the same reasons as mentioned therein, we find no merit in this appeal of the Revenue.
35. In the result, the appeal filed by the Revenue for assessment year 2004-05 stands dismissed.
27 I.T.A. Nos. 31 to 37/Mds/10I.T.A. No. 37/Mds/2010
36. Similar ground as taken in I.T.A. No. 36/Mds/2010 for assessment year 2004-05, has been taken by the Revenue here also.
37. For the reason mentioned by us at para six above, we dismiss this appeal of the Revenue.
38. To summarise the results, Revenue's appeal for assessment years 2001-02 & 2002-03 are allowed for statistical purposes, and those for assessment years 2002-03, 2003-04 and 2004-05 are dismissed.
The order was pronounced in the Court on 30th September, 2011.
sd/- sd/-
(Hari Om Maratha) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 30th September, 2011.
Kri.
Copy to: (1) Appellants
(2) Respondent
(3) CIT(A), Tiruchirapalli
(4) CIT-II, Trichy
(5) D.R.
(6) Guard file