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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice- & Shri K. Narasimha Chary
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri K. Narasimha Chary, Judicial Member Assessment Year: 2009-10 GOCL Corporation Ltd Vs. Dy. CIT Hyderabad Circle 2(2) PAN:AABCG8433B Hyderabad (Appellant) (Respondent) Assessee by: Advocate Y Ratnakar Revenue by: Smt.TH Vijaya Lakshmi,CIT(DR) Date of hearing: 20/09/2023 Date of pronouncement: 22/09/2023 ORDER
Per R.K. Panda, Vice-President
1. This appeal filed by the assessee is directed against the order dated 15.11.2021 of the learned CIT (A)-NFAC, Delhi relating to A.Y.2009-10.
There is a delay of 74 days in filing of this appeal by the assessee for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation petition filed along with the affidavit and after hearing both sides, the delay in filing of this appeal by the assessee is condoned and the appeal is admitted for adjudication.
Facts of the case, in brief, are that the assessee is a limited company and engaged in the business of manufacturing of industrial explosives and lubricant oils. It filed its return of income at Rs.Nil after setting off of brought forward business loss and Long Term Capital Gain of Rs.22,89,67,996/-. Subsequently, the assessee revised its return of income on 8.3.2011 and declared the total income at Rs. ‘Nil’ after setting off of brought forward business loss and Long-Term Capital Gain of Rs.10,47,14,795/-. The matter was referred to the TPO for determination of the ALP. Thereafter the Assessing Officer passed the draft assessment order. The assessee approached the DRP who gave directions to the Assessing Officer. The Assessing Officer thereafter completed the final assessment u/s 143(3) r.w.s. 92CA/r.w.s. 144C(13) of the Act determining the total income from capital gains at Rs.29,93,11,692/-. The assessee preferred an appeal before the Tribunal who allowed the appeal of the assessee on account of addition made by the Assessing Officer towards disallowance of expenditure u/s 14A. However, so far as the issue of quantification of capital gains and credit for TDS and quantification for carry forward unabsorbed depreciation are concerned, the same was restored back to the file of the Assessing Officer with certain direction.
In compliance to the directions of the Tribunal, the Assessing Officer passed the order u/s 143(3) r.w.s. 254 of the Act on 30.03.2017 computing the capital gain at Rs.31,91,82,795/-. After setting off of unabsorbed depreciation at Rs.2,06,45,285/-, the Assessing Officer determined the net income from capital gain at Rs.29,85,37,510/-.
The assessee filed an appeal before the CIT (A) NFAC who dismissed the appeal filed by the assessee on the issue of quantification of capital gain by observing as under:
Aggrieved with such order of the learned CIT (A) NFAC, the assessee is in appeal before the Tribunal by raising the following grounds:
The order of the learned Commissioner of Income-Tax (Appeals) National Faceless Appeal Centre dated 15/11/2021 is contrary to law and facts.
2. The appellant contents that the learned Commissioner erred in directing that for the purpose of calculation of capital gains on transfer of specialty chemicals division under scheme of Amalgamation, the sale consideration of shares allotted should be taken at Rs.63.74,14,000/- in the place of Rs.42,29,46,000/-. 3. The learned Commissioner erred in not appreciating the appellant's submission that the said sum of Rs.42,29,46,000 represents fair market value of the shares based on the value of assets as determined by the valuation report. In the facts of the case, the sale consideration should have been taken at Rs.42,29,46,000/- for the purpose of determining the capital amalgamation for asst. gain/loss on year 2009-10 for hiving off the specialty division. Chemicals Division. 4. The learned CIT (A) erred in not appreciating the contention that the value of shares taken for the purpose of determining the capital gain/loss on amalgamation shall be the cost of acquisition in the next assessment year, viz.2010-11 when these shares allotted were sold by the appellant company. The cost of acquisition was taken in asst. year 2010-11 at Rs.42,29,46,000/- for calculating the capital gain/ loss on sale of these allotted shares. Hence, the sale consideration of the shares in asst. year 2009-10 should be taken at Rs.42,29,46,000 and not Rs.63,74, 14,000/-. 5. In any event, the calculation of capital gain at Rs. 9,12,96,404/- is erroneous and excessive. 6. The appellant craves lead to add, amend or alter any of the aforesaid grounds as the occasion may require in the facts of the case.”
The learned Counsel for the assessee at the outset drew the attention of the Bench to para 10 of the order of the Tribunal for the A.Y 2009-10 vide dated 16.10.2015 wherein the Tribunal has restored the issue to the file of the Assessing Officer with certain directions by observing as under: “10. Having regard to the rival contentions and the material on record, we find that the transaction of transfer of shares to assessee and further transfer of same shares in the subsequent AYs to Hinduja Ventures, both the transaction being linked to each other and hence the value adopted in Page 4 of 6
AY 2009-19 would be cost of acquisition in A.Y 2010-11. Since the valuation of shares for the AY 2010-11 has been remitted to the file of the AO for computing capital gains from such transaction, the cost of acquisition to be adopted by AO for AY 2010-11 would be relevant for computing capital gain from the transaction of AY 2009-10. Therefore, in order to have a uniform and consistent view, we deem it, fit and proper to remit the issue to the file of the Assessing Officer for this AY also. Accordingly, this issue is to be treated as allowed for statistical purposes.”
He submitted that despite the directions of the Tribunal for A.Y 2010-11, the Assessing Officer did not give any relief and the matter for the A.Y 2010-11 is pending before the CIT (A)-10, Hyderabad. He accordingly submitted that he has no objection if the issue for this year also is restored to the file of the CIT (A)-10 to decide the issue for the A.Y 2009-10 along with the appeal for the A.Y 2010-11.
The learned DR, on the other hand, while supporting the order of the learned CIT (A) fairly conceded that she has no objection, if the matter is restored to the file of the same CIT (A) for deciding the appeals for both the A.Ys.
We have heard the rival arguments made by both the sides and perused the record. A perusal of the direction of the Tribunal for the A.Y 2009-10 shows that the Tribunal, in order to have a uniform and consistent view, deemed it fit and proper to restore the issue to the file of the Assessing Officer for the A.Y 2009-10. Since the appeal for the A.Y 2010-11 is pending before the learned CIT (A) on similar issue, therefore, in order to have a uniform and consistent view, we deem it proper to restore the issue to the file of the learned CIT (A) for this A.Y also with a direction to decide the appeals for the A.Ys 2009-10 and 2010-11 together. In case the order for A.Y 2010-11 is passed by the time Page 5 of 6 the order of the Tribunal for the A.Y 2009-10 is received, then the learned CIT (A) shall decide the issue keeping in mind the order for the A.Y 2010-11. Needless to say the learned CIT (A) shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.