Asstt. CIT v. Padma Logistics & Khanij Pvt.
Ltd. [ITA No. 606/Kol/2018, dt. 22-5-2020]
Carry forward and set off loss on de-merger by filing
revised return -- Decision in favour of assessee
Facts:
One SYK Ltd., Mumbai agreed to demerge their loss making Vortal
division in favour of the assessee with effect from 1-3-2010 in accordance with
section 2(19AA) read with 72A(4). Approval petitions for demerger were moved
before both Mumbai and Kolkata high courts who approved the demerger on
8-3-2011 and on 21-4-2011 respectively but with effect from 1-3-2010. Demerger
thus takes effect from 1-3-2010.
Assessee returned income on 28-9-2010 declaring Rs. 8.67
crores without cognisance of carry forward of losses and unabsorbed
depreciation of would be demerged entity due to pendency of court approvals.
Post court approval for demerger; On 9-6-2011 assessee
filed revised return with NIL income, claiming brought forward loss and
unabsorbed depreciation of the taken over Vortal division of SYK Ltd.
Assessing officer in scrutiny assessment objected by
considering original return negating assessee's revised return that --
1. No mention of demerger
pendency was in the audited accounts.
2. Loss return was not filed on
time per section 139(3) to claim carry forward of losses.
3. Revised return was filed
after notice under section 143(1) thus not as per section 139(5).
4. Alleged double claim of same
losses by both demerging and resultant company.
Commissioner (Appeals) allowed assessee's appeal on facts.
An aggrieved department went in appeal to ITAT who held in favour of assessee
holding that --
1. Mention of demerger fact in
notes to accounts of assessee is sufficient.
2. Is a revised return filed on
time which cannot be ignored. It was filed before assessment as well. Original
return was not a loss return as assessee could not have known outcome of court
approval of demerger.
3. Section 143(1) notice not a
bar to accept revised return if it is within time before assessment.
4. No alleged double claim duly
corroborated with evidence.
5. Section 139(3) makes mention
only of section 72A(3) and not of section 72A(4) under which demerger
specifically gets covered.
6. Revised return was 'NIL'
return not 'loss' return.