THE PRINCIPAL COMMISSIONER OF INCOME-TAX, VADODARA-1 vs. INOX RENEWABLE LTD.

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TAXAP/719/2019HC GujaratGJHC24065715201918 November 2019Author: HONOURABLE MS. JUSTICE HARSHA DEVANI,HONOURABLE MS. JUSTICE SANGEETA K. VISHEN3 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) did not err in its order. The Tribunal had relied on its earlier decision in the case of the vendor, M/s. Gujarat Fluorochemicals Ltd., wherein it was held that the transaction materialized in the accounting period relevant to assessment year 2012-13. The Tribunal further held that since the vendor sold the wind energy division in assessment year 2012-13, the assessee acquired the asset in that year and was entitled to depreciation. Crucially, the revenue had appealed the ITAT's decision in the vendor's case to the High Court, which was dismissed. As the ITAT merely followed its upheld decision and applied it to the present case, the High Court found no legal infirmity warranting interference. The appeal was therefore dismissed.

What were the facts?

The appeal concerns the assessment year 2012-13. The dispute revolves around the date of transfer of the wind energy business of M/s. Gujarat Fluorochemicals Ltd. to the assessee, Inox Renewable Ltd. (IRL), through a slump sale. The assessee contended that the transfer occurred on March 30, 2012, falling within the financial year 2011-12. The revenue, however, argued that the process of transferring assets and liabilities was initiated in the financial year 2012-13. The Income Tax Appellate Tribunal (ITAT) relied on its prior decision concerning the vendor company, M/s. Gujarat Fluorochemicals Ltd., which held the transaction materialized in the accounting period relevant to assessment year 2012-13. The revenue's appeal against that decision was dismissed by the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal erred in law and on facts in considering the date of transfer of the Wind Energy Business of the vendor company, M/s. Gujarat Fluorochemicals Ltd., to the assessee, Inox Renewable Ltd. (IRL), on slump sale as March 30, 2012 (F.Y. 2011-12), despite the admitted fact that the process of transferring various assets and liabilities was initiated in F.Y. 2012-13? Assessee's contentions: The assessee contended that the sale took place on March 30, 2012, falling within the financial year 2011-12. Revenue's contentions: The revenue contended that the process of transferring various assets and liabilities was initiated in the financial year 2012-13, relevant to assessment year 2013-14. The revenue relied on the fact that the process of transfer was initiated in FY 2012-13.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

C/TAXAP/719/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 719 of 2019 ====================================== THE PRINCIPAL COMMISSIONER OF INCOME-TAX, VADODARA-1 Versus INOX RENEWABLE LTD. ====================================== Appearance: MR.VARUN K.PATEL(3802) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ====================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Date : 18/11/2019

ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)

By this appeal under section 260A of the Income Tax Act, 1961, the appellant - revenue has called in question the order dated 07.03.2019 passed by the Income Tax Appellate Tribunal in ITA No. 1731/Ahd/2017, by proposing the following question, stated to be a substantial question of law: "Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal has erred in law and on facts in considering date of transfer of Wind Energy Business of the vendor company i.e. M/s. Gujarat Fluorochemicals Ltd. to the appellant assessee i.e. Inox Renewable Ltd. (IRL) on slump sale as 30.03.2012 i.e. F.Y. 2011-12, despite the admitted facts that even the process of transferring various assets and liabilities was initiated in F.Y. 2012-13?”

The assessment year is 2012-13. C/TAXAP/719/2019 ORDER

The short question in this case relates to the date of transfer of various assets and liabilities from M/s. Gujarat Fluorochemicals Ltd. to the assessee - Inox Renewable Ltd. (IRL) on slump sale. According to the assessee, the sale took place on 30.03.2012 i.e. in the financial year 2011-12, whereas, it is the case of the appellant that the process of transferring various assets and liabilities was initiated in the financial year 2012-13, relevant to assessment year 2013-14. 4. The Tribunal, in the impugned order, has placed reliance upon its earlier decision in the case of the vendor namely M/s. Gujarat Fluorochemicals Ltd., wherein, it has held that the transaction had materialized in the accounting period relevant to assessment year 2012-13 and allowed the appeal and has further held that since in the case of the vendor, it has been held that wind energy division was sold in the assessment year 2012-13, it is construed that the assessee has acquired this asset in this year and is entitled to depreciation thereon.

It is an admitted position that against the order passed by the Tribunal in the case of the M/s. Gujarat Fluorochemicals Ltd. namely the vendor, revenue had preferred an appeal before this court being Tax Appeal No. 28 of 2019, which has been dismissed by a judgment and order dated 17.06.2019. 6. Since, the Tribunal has merely followed its earlier decision in the case of M/s. Gujarat Fluorochemicals Ltd., which decision has been upheld by this court in Tax Appeal No. 28 of 2019, and has applied it to the facts of the present case, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to C/TAXAP/719/2019 ORDER any question of law, much less, substantial question of law, warranting interference.

The appeal, therefore, fails and is accordingly, summarily dismissed. [ Harsha Devani, J. ] [ Sangeeta K. Vishen, J. ] hiren

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