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Facts
The assessee is challenging additions made to its income concerning purchases, suppression of production, job work charges, and other expenses. A significant issue revolves around an addition of Rs. 3,32,62,148/-, made by treating income of an amalgamated entity as the assessee's income.
Held
The Tribunal found merit in the assessee's contentions regarding the amalgamation, holding that income of the amalgamated entity cannot be added in the hands of the assessee. Several grounds related to additions for purchases, suppression of production, job work, and certain expenses were also allowed.
Key Issues
Whether income of an amalgamated entity can be taxed in the hands of the assessee company, and the validity of various additions made by the Assessing Officer and confirmed by the CIT(A) regarding purchases, production, job work, and other expenses.
Sections Cited
143(3), 40A(3), 68, 234B, 271D, 271E, 6DD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI ANUBHAV SHARMA & SHRI AMITABH SHUKLA
The present appeal filed by the assessee is directed against the order dated 29.09.2017 passed by the CIT(A)-10 New Delhi, arising out of the Assessment Order dated 30.12.2016 passed by the DCIT, Circle-3(2)
New Delhi, under Section 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) for Assessment Year 1992-93.
The assessee has raised the following grounds before us:
“1. That the order of the learned Commissioner of Income Tax(Appeals)- X, New Delhi is bad in law and against the facts and circumstances of the case.
2. hat the learned Commissioner of Income Tax(Appeals)-X, New Delhi failed to appreciate that the order passed by the Deputy Commissioner of Income Tax, Circle 3(2), New Delhi is perverse in law and facts and has been passed in a pre-determined and biased manner without considering the submissions and evidences placed on records. Even the request made to Learned CIT(A)-X, New Delhi for requisition of the assessment records was not considered.
3. The Learned CIT(A)-X, New Delhi was not justified in not appreciating the fact that the assessing officer was not justified in law and facts for making addition of Rs.10,48,88,748/- towards introduction of unaccounted income in the garb of purchases without doubting the turnover achieved by the assessee company. The above addition has been made by treating the above purchases as unaccounted money of the assessee without recording any finding that how unaccounted money has been introduced. Learned CIT(A)-X, New Delhi had just repeated and relied the findings of the assessing officer without adjudicating and examining the issue independently.
4. That the learned CIT(A)-X, New Delhi is erred in confirming the addition of Rs.6,85,296/-treating purchases credited twice by repeating the findings of the assessing officer without adjudicating and examining the issue independently and without considering the evidences referred and filed along with submission dated 08.08.2016 in the shape of ledger accounts during the course of assessment proceedings.
5. The Learned CIT(A)-X, New Delhi was not justified in not appreciating the fact that the assessing officer was erred in making an addition of Rs.2,35,99,954/- on account of suppression of the production by estimating production by taking weight/gauge of each item produced as standard without appreciating that different items bears different weight and dimensions and raw material consumed was of varied thickness/gauge. The learned CIT(A)-X, New Delhi has simply relied upon the observations made in the assessment order ignoring the factual findings of the Ld. CIT(A)-XIX, New Delhi in his orders dated 29.05.1996 and statements recorded in this respect.
6. Without appreciating the fact in correct perspective, job work charges have been added/confirmed at Rs.10,91,997/- without allowing expenditure of the same amount in the case of M/s Asian Consolidated Industries Ltd. as both the entities, inadvertently, left claiming job work charges as their income and expenditure in their respective financial statements.
7. The disallowance of interest which has been made of 47,157 is not justified in view of the facts submitted as per the submission dated 08.08.2016 filed during the course of assessment proceedings.
8. That the learned CIT(A)-X, New Delhi erred in confirming the ad-hoc disallowance of entertainment expenses of Rs. 3,244/- which is contrary to the facts and judicial pronouncements.
That the addition u/s 40A(3) of the Act of Rs.1,16,29,961/- was confirmed without considering the fact that the payments made of Rs. 11,400/- and Rs. 17,595/- were covered u/r 6DD of the Income Tax Rules, 1962 and the remaining amounts were settled through adjustment entries by way of passing journal entries and no cash was paid in violation of the provisions of section 40(3) of the Act. The learned CIT (A)-X, New Delhi had just repeated the findings of the assessing officer without examining the issue himself and without requisition of the assessment records, for which assessee company had made a request.
10. The Ld. CIT(A)-XIX, New Delhi is erred in confirming the addition of Rs.5,31,40,700/-towards share capital without considering the submission dated 16.08.2017 wherein the assessee has not only explained the nature of the subscription i.e. subscription was received on right issue basis and had also filed evidences in support of the claim. However, without considering the evidences placed on records, the addition has been confirmed in an un-justified manner.
11. The 11th ground of appeal i.e. disallowance of 20% of the administrative, selling and distribution expenses was not at all considered and adjudicated. Similarly the ground 13 of the appeal filed before Ld. CIT(A)-X, New Delhi was specific but was not adjudicated in the impugned order dated 29.09.2017.
12. That initiation of the penalty proceedings u/s 271D and 271E of the Act is not only beyond the jurisdiction but contrary to the facts as per the records. Further the assessing officer is also not justified in initiating the penalty u/s 271(1)(c) of the Act.
13. That charging of the interest u/s 234B of the Act is highly excessive. Further charging of the interest for the period in which company was under liquidation and under the control of Official Liquidator appointed by Hon'ble Punjab & Haryana High Court was not justified as the management of the company ceased to exist and had no control over its affairs.
14. That the demand created consequent to the assessment/appellate order is highly excessive and un-reasonable in view of the facts submitted in the above grounds and deserves to be deleted.
That the above grounds of appeals are independent and without prejudice to one and another.
16. That the appellant craves lease to add, alter, amend or delete any of the grounds of appeal.”
In addition to the above, the assessee has raised the following additional ground of appeal:
17 (i) On the facts and circumstances of the case, the CIT(A) has erred both on facts and in law in not deleting the addition of Rs. 3,32,62,148/- made by the assessing officer as income pertaining to M/s. Asian Consolidated Industries Limited for AY 1992-93.
(ii) That the above addition has been made without appreciating the fact that the assessee company have got amalgamated with M/s. Asian Consolidated Industries Limited with effect from 20th March 1992 and as such income of the company in which the assessee has got amalgamated can't be added in the hands of the assessee company.
(iii) That even otherwise this income of M/s. Asian Consolidated Industries Limited of Rs. 3,32,62,148/- taken and added by the assessing officer is incorrect."
That the ground raised in this application is a legal ground going to the root of the matter, and all the facts relating to the same are already part of record.”
7. That in the circumstances, it is prayed that the above additional ground may be taken on record.”
With regard to the additional ground of appeal, at the very outset, the ld. counsel for the assessee submitted that the Assessing Officer has made an addition of Rs. 3,32,62, 148/- as income pertaining to M/s. Asian Consolidated Industries Limited for AY 1992-93 without appreciating that the assessee, M/s. Asian Closures Ltd., had amalgamated with M/s. Asian Consolidated Industries Limited (ACIL), effective from March 20, 1992.
The ld. counsel for the assessee contended that as per the facts of the case, the amalgamation of the assessee company with ACIL has already been recognized and accepted by the tax department. Consequently, the income of the assessee company for the relevant F.Y. should have been consolidated with the income or loss of ACIL, the amalgamated entity.
However, contrary to these facts, the income of the amalgamated company, ACIL, has been improperly merged with the income of the assessee company.
6. It is the say of the ld. counsel for the assessee that the addition of Rs. 3,32,62,148/- as income is fundamentally flawed. The Assessing Officer and CIT(A) have not adequately considered that due to the merger this income post-amalgamation. The income and financial statements of an amalgamated company must reflect the earnings, liabilities, and obligations of the entities as one single entity following the effective date of the amalgamation
The ld. counsel for the assessee continued by saying that furthermore, even on the merits, the addition of Rs. 3,32,62,148/- as income in the hands of the assessee company is incorrect. This income pertains solely to ACIL and does not belong to the assessee company, M/s. Asian Closures Ltd. It is unjust to assess this income separately in the hands of the assessee company when it should be consolidated with ACIL, the entity with which the assessee company has legally merged.
Accordingly, the ld. counsel for the assessee prayed that the improper addition of income in the hands of the assessee company should, therefore, be deleted to comply with both factual circumstances and legal requirements.
Accordingly, the same is admitted.
Ground Nos. 1 and 2 are general in nature.
Briefly stated, the facts of the case are that the addition of Rs. 10,40,88,748/- was made on account of the purchases from M/s Babbar Industrial and Trading Company, Amritsar. The basis for making such addition was that these purchases were considered as paper transactions, and it was inferred that the assessee had introduced its own income in the garb of bogus purchases.
At the very outset, the ld. counsel for the assessee submitted that the purchases from M/s Babbar Industrial and Trading Co., Amritsar, were genuine, with transportation costs incurred by the party as per the terms of purchase. The transportation charges were included in the cost of purchases, and therefore no separate documentary support was maintained by the assessee company as these were the vendor's expenses. M/s Babbar Industrial and Trading Co. arranged for the goods to be delivered to the premises of the company. the course of the original assessment/appellate proceedings, the assessee company also filed details of the purchases from the above-mentioned party and a confirmed ledger account to substantiate that M/s Babbar Industrial and Trading Co. is a genuine and existing entity that made sales to the assessee company, duly accounted for in the books. It has also been argued that the sales made by the company were not doubted by the learned Assessing Officer while passing the assessment order. The sale proceeds were not treated as bogus. When the sale proceeds were not treated as bogus, then how could the purchases be doubted? If the sales are undisputed, credit should be given for the purchases, as purchases precede sales, and without purchases, sales could not have been conducted. Thus, treating purchases as bogus when the sales are not disputed is contradictory. In view of the above, it was submitted that no adverse inference should be drawn in this regard.
It has also been alleged by the Assessing Officer that the assessee company introduced its own unaccounted income under the guise of bogus purchases. However, it was submitted that the burden of proof lies on the party making the allegations. While completing the assessment, the onus on the Assessing Officer to establish this claim was not discharged. Not a single piece of evidence or finding was provided to suggest that the assessee company had any unaccounted funds introduced as bogus purchases.
15. The ld. counsel for the assessee concluded by saying that this issue is squarely covered in favour of the assessee by the order of the CIT(A) dated 28.05.1996. The relevant portion of the order reads as under:
"The A.O. further concluded that the purchase and sale transaction was entered into in the books of accounts with the sole purpose of introducing the appellant's undisclosed income. I do not agree with this finding. It is not the case of the A.O. that any unaccounted income was introduced in the books. In fact, neither the appellant made any payment for the purchases nor received any amount for the sale proceeds. Both the purchase and sale transactions were squared up through adjustment entries. At the time of the first purchase by the appellant, credit was given to M/s B.I. & T.C., and the account of the appellant was debited. In the second transaction of sale to M/s ACL, the appellant's account was credited, and that of ACL was debited. In the third transaction, the account of M/s ACL was credited, and that of TAPL was debited. In the fourth transaction through which the account with the original seller was squared up, the account of M/s TAPL was credited, and that of M/s B.I. & T.C. was debited. No funds were exchanged in any of these transactions. This was admitted by the A.O. If no funds were exchanged at any stage, the charge of introducing undisclosed income remains unproven. On this basis, addition was deleted in the case of M/s Asian Consolidated Limited. The facts and circumstances being the same, the addition in this case is also deleted......"
Per contra, the ld. DR relied upon the order of the Assessing Officer.
After considering the rival submissions, we find that the Assessing Officer while passing the order dated 30.03.1999 has not made any addition with respect to this issue and hence this issue attained finality.
Therefore, the Assessing Officer and CIT(A) in the present proceedings have not appreciated the facts while sustaining the addition. We find substance in the submissions of the ld. counsel for the assessee. The order of the Id. CIT(A) is well reasoned and accordingly, we decline to interfere with the same on this count. Ground No. 3 is allowed.
Ground No. 4 is in relation to the addition of Rs. 6,85,296/- on account of purchases doubly entered. material on record. We find that while passing the assessment order for the year under consideration, it was alleged that the company recorded its purchases twice to the extent of Rs. 6.85,296.40, i.e., once as per JVL-79 dated 20.3.92 for Rs. 5,94,228/- and JVL-80 dated 20.3.92 for Rs. 91,068.40, and also under the purchase head 701100, which represents imported raw material appearing in excise records.
In response to notice, the ld. counsel for the assessee submitted that the assessee company did not record purchases twice. In the details submitted for total purchases made of Rs. 12,90,55,792/- during the course of appellate proceedings, no duplicacy is evident. The Assessing Officer while passing the order dated 30.03.1999 has not made any addition with respect to this issue and thus this issue attained finality.
We find that the ld. CIT(A) simply rejected the ground of appeal raised by the assessee as the submissions of the assessee were not supported by evidence. However, we find no duplicacy in the purchases which is evident from the ledger account. In view thereof, we allow Ground No. 4.
Brief facts relating to this issue are that the Assessing Officer made the impugned addition on the ground that the assessee suppressed its production and sale of finished goods. According to the Assessing Officer, the assessee sold finished goods of the value of Rs. 1,22,05,636/-. As against that, the cost of raw material consumption has been claimed at Rs. 2,21,12,433/-. It was observed by the Assessing Officer that the consumption of raw material comes to 181.17% of the goods manufactured and sold. The Assessing Officer has referred to the working given by the Special Auditors. According to the Special Auditors, the assessee could have consumed 240178 kgs. Of raw material for the production of goods valuing at Rs. 1,22,05,636/-. It was further mentioned that the consumption of 704571.70 kgs of raw material should have produced finished goods worth Rs. 3,58,05,590/-. The difference of the two (Rs. 3,58,05,590- Rs. 1,22,05,636/-) i.e. the expected value of goods produced and the value of the actual goods produced, was added as the income of the assessee. contended that the Assessing Officer applied standardized weight of the number of items produced to arrive at the conclusion mentioned in the assessment order. It was pointed out that this method was not correct because the appellant was producing goods of different weights and dimensions. It was submitted that certain items such as ghee tin etc. require thick material whereas certain other items like milk powder, baby foods etc. require comparatively thinner material. It was further pointed out that the Special Auditors asked for the weight of the finished products which were under production at the time of the Special Audit.
The weight of the item under production was supplied to the Special Auditors. This weight of a particular item was taken as standard weight for the whole of the production and the conclusions drawn therefrom.
It was further submitted that as the assessee was manufacturing different types of items, the weight of a particular item should not have been taken into consideration. The Special Auditors should have been taken into consideration the items produced in the year relevant to the A.Y under consideration. the manufacturing process. However, he could not estimate the percentage of wastage so generated.
Aggrieved, the assessee went in appeal before the Id. CIT(A).
After carefully considering the facts of the case the Id. CIT(A) observed that the Assessing Officer did not give any credit for the wastage generated in the manufacturing process. It was admitted by him that certain wastage does take place. The assessee claimed such wastage to be more than 60%. The explanation given does strengthen her case.
The scrap so generated had substantial value. No prudent businessman would ever allow such valuable item to go waste. The only probable conclusion which could be drawn is that the assessee sold the scrap but omitted to record the sale proceeds in the books of accounts. As regards the actual weight of scrap, it was noticed that the A.O. had computed the same at 464393 kgs. (704571-240178). As against this it was pointed out by the learned counsel that the weight of scrap cannot be more than 336699 kgs. Accordingly, to her, the consumed raw-material of 704571 kgs. Included 63961 kgs. of lining compound (23944 kgs.) and aluminum had computed the weight of the finished goods by applying a standard weight. The learned counsel furnished details of the items of different sizes of the items produced and their weight. This was verified and found to be correct. This way the weight of the scrap generated weighed at 336699 kgs. It was also claimed that only 25% of this scrap was in saleable in the market. The Id. CIT(A) did not agree with this claim. The Assessing Officer was directed to ascertain the market rate of the scrap at the relevant time and restrict the addition to the resultant figure (336699 kgs. X sale rate of scrap)."
Per contra, the ld. DR relied upon the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. Instead of ascertaining the sale price of the scrap at that period of time, the assessing officer resorted to making the same addition in above mentioned ex-parte order which is in contradiction to the directions given by the CIT(A) in order dated 28.05.1996. It was submitted that during the year under consideration, the assessee books of accounts, weighing 7,910 kg from which it is evident that the market value of the scrap at that period of time was Rs. 13.05 per kg.
Accordingly, the Id. CIT(A) held that in accordance with the directions of the order dated 28.05.1996, the value of scrap, which, at the most, can be evaluated, comes to Rs. 43,93,922/-(3,36,699 kg x 13.05) against the addition made of Rs. 2,35,99,954/- as per the orders passed under the present proceedings.
We find force in the contentions of the ld. counsel for the assessee that while passing the order u/s 144/250 of the Act, the then Assessing Officer, in total disregard to the direction given, had made addition of the same amount i.e. Rs. 2,35,99,954/-. However, as per the directions of the ld CIT(A)-XIX, New Delhi, the quantum of scrap has been worked out/determined at 3,36,999 kg. and it was directed to restrict the addition to the value of the same i.e. scrap determined at 336999 kg. on the basis of the rate prevailing at that period of time. The contention of the ld. counsel for the assessee that over time the scrap generated during the course of business activity gets rusted and has no saleable value finds proneness to rusting, no addition can be made in this regard. Ground No. 5 is allowed.
Ground No. 6 relates to income from job work done.
Brief facts are that during the year under consideration, the assessee company had done Job Work for M/s Asian Consolidated Industries Ltd. on 242.666 MT of Tin sheets at the rate of Rs. 4,500 per MT. However, Job Work charges have, inadvertently, not been recorded either by the two entities-i.e., not shown as received by the assessee company nor claimed as expenditure by M/s Asian Consolidated Industries Ltd.
While deciding the appeal for the year, ld CIT(A) considered the facts and circumstances of the units/entities and directed for adding the same, i.e., job charges to the income of the assessee company after allowing expenditure in the case of M/s Asian Consolidated Industries Ltd. material on record. We find that both the entities have merged/amalgamated and their affairs are merged together hence, the issue has become revenue-neutral, i.e., for one unit it is expenditure and for the other unit it would be receipt. Accordingly, this addition is directed to be deleted. Ground No. 6 is allowed.
With regard to ground 7 being interest disallowance and Ground No. 8 relating to disallowance of Rs. 3,244/-, since the Assessing Officer has not made any addition, these issues have attained finality. Ground Nos. 7 and 8 are allowed.
Ground No. 9 relates to addition made u/s 40A(3) of the Act.
Brief facts relating to this issue are that while making additions u/s 40A(3) of the Act, the Assessing Officer has considered the following transactions as covered under the violation of section 40A(3) of the Act:
• Payment made to M/s Aggarwal Cement Agency (30.06.91) - Rs. 11,400 M/s Asian Closures Ltd. (AY: 1992-92) • Payment made to Ram Lal, Labour Contractor (08.08.91) - Rs. 17,595 • M/s Babbar Indl. & Trading Co. (20.03.92) - Rs. 42,54,400 • M/s K.R. Steel Union (20.03.92) - Rs. 40,33,566 • M/s Trans Asia Packaging Ltd. (20.03.92) Rs. 31,35,000 • M/s K.R. Steel Union (20.03.92) Rs. 1,78,000 Total: Rs. 1,16,29,961
The ld. counsel for the assessee submitted that the assessee company, during the year under consideration, has not made any violation within the ambit of section 40A(3) of the Act and explained the above transactions as follows:
payment of Rs. 11,400/- was made to M/s Aggarwal Cement Agency, with whom the assessee company had just started making purchases and the party had refused to accept the payment through cheque. Covered under Rule 6DD of the Income Tax Rules, 1962.
payment of Rs. 17,595/- was made to Shri Ram Lal, Labour Contractor, who insisted on cash payment, which was to be distributed among small laborers. Covered under Rule 6DD of the Income Tax Rules, 1962
For the remaining transactions, it is submitted that not a single payment has been made in cash in violation of the provisions of section 40A(3) of the Act. For the purchases made from M/s Babbar Industrial and Trading Co. amounting to Rs. 42,54,400/-, the account was settled by debiting the account of the above company and crediting M/s Asian Consolidated Industries Ltd. The respective ledgers of M/s Babbar Industrial Trading Co. and M/s Asian Consolidated Industries Ltd. in the books of the appellant company are submitted.
A similar position applies to other transactions, which were also settled through adjustment/journal entries. With respect to the purchase from M/s K.R. Steel Union of Rs. 40,33,566/-, the same was settled/adjusted by debiting its account and crediting the account of M/s Trans Asia Packaging Ltd. For the kind consideration, the appellant has submitted the account of M/s Trans Asia Packaging Ltd. in its books of accounts.
The transaction of Rs. 31,35,000/- with M/s Trans Asia Packaging Ltd. is not an expenditure but rather an adjustment of the financial transaction through journal entry among sister concerns, making it outside the scope of section 40A(3) of the Act.
The purchases made from M/s K.R. Steel Union of Rs. 1,78,000/- were debited to its account and credited to M/s Asian Consolidated
Industries Ltd. From the copy of the ledger of M/s Asian Consolidated Industries in the books of the appellant, it is evident that no cash has been paid in violation of section 40A(3) of the Act.
In appeal the Id. CIT(A) set aside the issue with the following directions:
“10.2. I have carefully considered the facts of the case. So for as the payments of Rs. 11,400/- and Rs. 17,595/- are concerned, I agree with the learned counsel that these were made under unavoidable circumstances and as such covered by Rule 6DD(1). No disallowance in respect of these two amounts is called for. The A.O. is directed to look into the other cash payments and disallow only that part which is relatable to any expenditure for the goods purchased or the services rendered. It is made clear that the provisions of section-40A(3) are not applicable to the cash advances. For this specific purpose the issue is restored to the file of the A.O. for re-adjudication.”
Aggrieved, the assessee is in appeal before us and contended hat that the Assessing Officer made an addition of Rs. 1,16,29,961/- in complete violation of the direction of CIT(A) order dated 28.05.1996, and thus the action of the CIT(A) in confirming the said addition is bad.
Officer.
We have heard the rival submissions and have perused the relevant material on record. We find that the Assessing Officer covered certain transactions in violation of provisions of section 40A(3) of the Act. We find the explanation of the assessee with regard to these transactions to be feasible. The ld. CIT(A) himself has agreed that certain transactions were unavoidable and covered by Rule 6DD(1) of the Rules. Accordingly, we find no justification in the addition made by the Assessing Officer and direct the Assessing Officer to delete the addition of Rs. 1,16,29,961/-.
Ground No. 9 is allowed.
Ground No. 10 relates to addition of share capital amounting to Rs. 5,31,40,700/-.
Brief facts are that the Assessing Officer made addition of Rs. 5,31,40,700/- on account of share capital u/s 68 of the Act and the Id.
CIT(A) confirmed the same. The assessee went in appeal before the ld. CIT(A) who deleted the same. The Assessing Officer has not made an the ld. counsel for the assessee that this issue has attained finality to be correct. Accordingly, Ground No. 10 is allowed.
Ground No. 11 pertains to disallowance of Rs. 8,60,910/- being administrative and selling expenses.
It is the say of the ld. counsel for the assessee that the Assessing Officer has made the disallowance of Rs. 8,60,910/- on an estimation basis and no material has been pointed out to suggest contradiction to the book result. The CIT(A) has also confirmed the same and the predecessor Assessing Officer has made the similar addition.
We have heard the rival submissions and have perused the relevant material on record. We find that the Id. CIT(A) has held that against the disallowance of Rs. 8,60,910/- out of administrative and selling expenses to the tune of Rs. 43,05,548/-, no supporting vouchers in this regard were produced. The selling and distribution expenses include expenses incurred on trading activity. Since the trading activity has been proved to be bogus no expenses on this account were allowed. The Assessing Officer disallowed a sum of Rs. 8,60,910/-.
Before us, the ld. counsel for the assessee contended that complete details of the expenses incurred were furnished to the Assessing Officer alongwith supporting vouchers. In the absence of any deficiency detected in the supporting vouchers, no disallowance could be made on estimate basis. We agree with this contention of the ld. counsel for the assessee. It is matter of settled law that the Assessing Officer could disallow a specific expenditure debited to the P&L account if such expenditure is either not related to the business activity or not supported by relevant vouchers. The Assessing Officer has not referred to any item of expenditure which is not supported by the specific vouchers. He has just estimated 20% of the expenditure as relatable to the trading activity and disallowed the same. There is nothing in the assessment order to indicate as to how much expenditure is relatable to the trading activity. Without giving such a finding, no disallowance is possible. Therefore, the disallowance made by the Assessing Officer was deleted by the Id. CIT(A).
The Assessing Officer has not made an addition with respect to this issue and hence it has attained finality. Accordingly, Ground No. 11 is allowed.
Ground No. 12, 13 and 14 pertaining to penalty proceedings u/s 271D and E of the Act and interest u/s 234B are consequential.
As regards the additional grounds, we find that there is sufficient force in the arguments of the ld. counsel for the assessee that post amalgamation, no income can be added in the hands of the assessee. In view of the above, all the grounds raised by the assessee including the additional grounds admitted by us hereinabove, are allowed. allowed. The order is pronounced in the open court on 31.07.2025.