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आयकर अपील�य अ�धकरण, lh lhlh lh खंडपीठ मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH सव�ी राजे��, लेखा सद�य एवं iou flag iou flag iou flag �या�यक सद�य iou flag Before S/Sh. Rajendra,Accountant Member & Pawan Singh,Judicial Member आयकर अपील सं/.ITA No.2346/Mum/2014,�नधा�रण वष�/Assessment Year-2008-09 Cargotec India Pvt. Ltd. ACIT 10(3), “Kesar Solitare”, 3rd Floor, Aayakar Bhavan, M.K. Road, Office Nos. 301-306, Plot No.5, Vs Mumbai-400020 Sector No.19, Sanpada, Navi Mumbai-400705. PAN:AABCH8289A (अपीलाथ� /Assessee) (��यथ� / Respondent) �नधा�रती ओर से/Assessee by : Shri Ketan K. Ved (AR) राज�व क� ओर से/ Revenue by : Ms. Radha Katyal Narang (DR) सुनवाई क� तार�ख / Date of Hearing : 27- 06 -2016 घोषणा क� तार�ख / Date of Pronouncement : 27-07-2016
ORDER/आदेश
�या�यक सद�य iou flag iou flag iou flag के अनुसार PER PAWAN SINGH, JM- iou flag 1. Present appeal is filed by assessee against the order of CIT(A)-22, Mumbai dated 3rd February 2014 for assessment year 2000-09. The assessee has raised following grounds of appeal. Application of Section 72A (1) the Learned Commissioner (appeals) erred in rejecting the appellant’s claim to carry forward accommodated losses/ absorbed depreciation of the amalgamating companies that is cargo tech manufacturing India private limited( CM IPL) and Kalmar India private limited(KIPL) in the hands of appellant. (2) The Learned Commissioner (appeals) ought to have provided the appellant an opportunity of demonstrative that the condition laid down in section 72A(2) had been fulfilled. (3) The ld Commissioner (appeals) ought to have directed the Learned assessing officer, quantified and specifically allow the carry forward of accommodated losses/unabsorbed depreciation of the amalgamating companies that is CMIPL and KIPL in the hands of appellant. (4) The Learned Commissioner (appeals) erred in directing the landed assessing officer to invoke provision of section 72A(3) and bring to tax, the deemed income in the hands of appellant. Disallowance in the hands of CMIPL (5). The Learned Commissioner (appeals) erred in confirming the action of landed assessing officer of not allowing deduction for the amount of Rs. 90,35,825/- disallowed under section 43B in the hands of CMIPL
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Disallowance in the hands of KIPL (6). The Learned Commissioner (appeals) erred in confirming the action of landed assessing officer of not allowing deduction for the amount of Rs. 40,79,401/-and Rs. 43,06,040/- disallowed under section 43B and 40(a)(ia), respectively, in the hands of KIPL. Expenditure disallowed (7). The Learned Commissioner appeals erred in confirming the disallowance of expenditure of Rs 141,911/- claimed under section 37(1). (8) Without prejudice to the above, the ld Commissioner (appeals) erred in holding that expenditure treated to registration charges toward the Pune property, chains of the company restoration and the valuation of equity share are capital in nature and would not fall within the purview of section 35DD. Depreciation disallowed (9). The Learned Commissioner appeals erred in confirming the disallowance of depreciation of Rs. 7828/- 2. At the time of making submission landed AR of the assessee made the statement that he is not pressing ground No. 7 to 9 due to the smallness amount. Thus, the Ground Nos. 7 to 9 raised in the present appeal are dismissed as not pressed. 3. Brief facts of the case are that assessee filed return of income for the relevant assessment year on 29 September 2008. The return of income was selected for scrutiny and while framing assessment, it was observed that Assessee Company had filed an application for merger before honorable High Court of Karnataka for amalgamation of M/s Cargotec Manufacturing India Pvt. Ltd. and Kalmar India Pvt. Ltd. The Hon’ble High Court allowed the petition of assessee with effect from 1st January 2008. Accordingly, the assessee company filed its revised return of income from 1st January 2008 on 30th March 2010. In the revised return of income the assessee company revised its losses at Rs. 2675, 9205/-after adopting the sales, expenditure and the depreciation for the period from 1st January, 2008 to 31st March 2008 in respect of amalgamating companies. While framing assessment the AO not allowed carry forward accumulated loss/unabsorbed depreciation of amalgamating companies, disallowed deduction of Rs. 90,35,825/- under section 43B in the hands of CMIPL and further disallowed deduction of Rs.40,79,401/- under section 43B and Rs. 430,6,040/- under section 4o(a) (ia) in the hands of KIPL. Aggrieved by the
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order of AO assessee filed appeal before the CIT(A) but without any success. Further aggrieved by the order of CIT(A), the present appeal is filed before us.
Ground Nos. 1 to 4 raised in the present appeal is related with the disallowance of claims of assessee to carry forward accumulated loss and unabsorbed depreciation of the amalgamating companies. Ground No. 5 to 6, are related with the disallowance of deduction under section 43B and section 40(a) (ia) of the Act. We have heard Ld. AR of assessee and Ld. DR for revenue and perused the material available on record. Ld AR of the assessee argued that the assessee is entitled for carry forward accumulated loss and unabsorbed depreciation of the amalgamating companies, as the assessee company has acquired all the right and liabilities, in accordance with the scheme of arrangement approved by High Court. The AO has not basically, quantified and allowed the losses of the amalgamating companies to carry forward for set off in the subsequent year. The AO has not provided any reason for not allowing the loss of the amalgamating companies, nor any question was raised during the assessment proceeding so that the assessee could substantiate the claim for carry forward of losses of the amalgamating company. Similar arguments were made in respect of other grounds raised in the present appeal. Ld AR for assessee further argued that at the stage of First Appeal ld CIT (A) not provided opportunity to explain that the condition laid down in section 72A(2) has been fulfilled. Ld DR for revenue strongly supported the orders of authorities below. 5. We have considered the rival contention of the parties and perused the material available on record. We have noticed that while framing the assessment order AO has not given any show cause notice to the assessee as to why accumulated loss or unabsorbed depreciation should not be disallowed. Similarly no question was raised with regard to other disallowance with respect to the contribution of ESI, PF and other disallowance of section 43B and 40(a) and (ia) by the AO. No reasons /grounds were mentioned for disallowance or for not allowing carrying forward losses of the amalgamated companies and in respect of disallowance of section 43B and 40(a) and (ia) by the AO. The Ld. CIT(A) while considering the claims of the assessee referred that AO duly considered the revised return filed by the assessee and accordingly
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computed the correct income. Almost identical findings are given in respect of all the grounds raised before the CIT(A). Ld CIT(A) has also not given opportunity at the stage of First Appellate stage to explain that the condition laid down in section 72A(2) and directed the AO to invoke the provision of section 72A(3) of the Act. We have noticed that the AO has not given any reason for disallowance nor discussed the various claims made in the revised return of income filed by the assessee, after approval of the scheme of amalgamation by the High Court of Karnataka. The order of AO as well as of Commissioner of Income Tax appeal is not sustainable in the eyes of law. As the same was passed without considering the various legal and factual contentions raised by the assessee particularly after passing the order of amalgamation by Hon’ble Karnataka High Court. Hence, we deem it appropriate to restore the Ground Nos. 1 to 6 to the file of AO to reconsider the claim of assessee and pass detailed reasoned order in respect of each and every claim separately by affording reasonable opportunity of hearing to the assessee. With these observations the appeal filed by assessee is allowed for statistical purpose.
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Order pronounced in the open court on 27th July,2016. आदेश क� घोषणा खुले �यायालय म� �दनांक 27 जुyk ykई,2016 को क� गई । ykyk
Sd/- Sd/- (राजे�� /RAJENDRA) (iou flag iou flag iou flag / PAWAN SINGH) iou flag लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई/Mumbai,�दनांक/Date: 27.07.2016 SK आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1.Appellant /अपीलाथ� 2. Respondent /��यथ� 3.The concerned CIT(A)/संब�ध अपील�य आयकर आयु�त, 4.The concerned CIT /संब�ध आयकर आयु�त 5.DR “C” Bench, ITAT, Mumbai /�वभागीय ��त�न�ध, lh lhlh lh खंडपीठ,आ.अ.�याया.मुंबई 6.Guard File/गाड� फाईल स�या�पत ��त //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपील�य अ�धकरण, मुंबई /ITAT, Mumbai.