CES Limited , Hyderabad v. Dy. Commissioner of Income Tax , Circle-1(2), Hyderabad

ITA 2088/Hyd/2018 | 2013-2014
Pronouncement Date: 21-11-2019 | Result: Partly Allowed

Our System has flagged this appeal as eligible for Vivad Se Vishwas Scheme. If you are party to this appeal, get on a Free Consultation Call with our team of Legal Experts who shall guide you as to how you can save huge Interest and Penalty in VSV Scheme.


Apply Now
        
Try VSV Calculator

Appeal Details

RSA Number 208822514 RSA 2018
Assessee PAN AADCS4564P
Bench Hyderabad
Appeal Number ITA 2088/Hyd/2018
Duration Of Justice 1 year(s) 21 day(s)
Appellant CES Limited , Hyderabad
Respondent Dy. Commissioner of Income Tax , Circle-1(2), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB-B
Tribunal Order Date 21-11-2019
Date Of Final Hearing 03-09-2019
Next Hearing Date 03-09-2019
Last Hearing Date 01-03-2019
First Hearing Date 01-03-2019
Assessment Year 2013-2014
Appeal Filed On 31-10-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 2088 /HYD./201 8 ASSESSMENT YEAR: 20 13 - 14 M/S CES LIMITED VS. D CIT CIRCLE 1 ( 2 ) C/O P. MURALI & CO. HYDERABAD. CHARTERED ACCOUNTANTS 6 - 3 - 655/2/3 1 ST FLOOR SOMAJIGUDA HYDERABAD 500 082 TELANGANA PAN: A A D CS4564P (APPELLANT) (RESPONDENT) FOR ASSESSE : SH. P. MURALI MOHAN RAO A.R. FOR REVENUE : S MT. MATTA PADMA D.R. DATE OF HEARING : 0 3 /0 9 /19 DATE OF PRONOUNCEMENT : 21 / 11 /19 O R D E R PER SMT. P. MADHAVI DEVI J.M. THIS IS ASSESSEES APPEAL FOR A.Y. 20 13 - 14 AGAINST ORDER OF CIT(A) - 1 HYDERABAD DATED 27.9.2018. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS INITIALLY KNOWN AS M/S SERVE ALL EN TERPR ISE SOLUTIONS LIM IT ED. THE SAID COMPANY GOT MERGED WITH M/S DECATREND TECHNOLOGIES PRIVATE LIMITED WHICH IS A WHOLLY OWNED SUBSIDIARY OF THIS COMPANY W.E.F. 01.04.2012 AS ORDERED BY THE HONBLE HIGH COURT OF ANDHRA PRADESH IN COMPANY PETITION NO.182/2013 DATED 14.11.2013 AND THE COMPANY APPLICATION NO.815/2013 IN THE CASE OF M/S DECATREND TECHNOLGIES PVT. LTD. AND M/S SERVE ALL ENTERPRISE SOLUTIONS LTD. THE AMALGAMATED COMPANY S NAME WAS SUBSEQUENTL Y CHANGED TO M/S ITA NO.2088/H Y D/2018 AY: 2013 - 14 CES L TD. HYDERABAD 2 CES PVT. LTD. WHILE FILING THE RETURN OF INCOME FOR RELEVANT A.Y . THE ASSESSEE COMPANY HAD TAKEN INTO CONSIDERATION THE INCOME OF BOTH THE AMALGAMATING COMPANY AND THE AMALGAMATED COMPANY AND ALSO HAD CLAIMED THE CREDIT FOR ADVANCE TAX AND TDS CREDIT OF BOTH THE COMPANIES PRIOR TO THE AMALGAMATION . DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT 1961 (THE ACT) THE A.O. HAD CONSIDERED THE INCOME ARISING TO THE AMALGAMATED C OMPANY BUT WHILE GRANTING CREDIT OF TDS AND ADVANCE TAX HE DID NOT ALLOW THE SAME IN TOTO. AGAINST THE SAID ORDER OF A.O. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO DISMISSED THE SAME HOLDING THAT THE ASSESSEE DID NOT SUBMIT ANY TDS CERTIFI CATE OR ADVANCE TAX PAYMENT DETAILS BEFORE THE AO/CIT(A). FURTHER SHE ALSO HELD THAT IN THE HONBLE HIGH COURT ORDER THERE IS NO MENTION ABOUT THE PARTICULAR ISSUE OR CLASS REGARDING THE TAXES PAID. AGAINST THIS ORDER OF THE CIT(A) THE ASSESSEE IS IN S ECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF THE A.O. WHEREIN CREDIT FOR TDS AND ADVANCE TAX WAS NOT ALLOWED WHICH THE ORDER PASSED BY A.O. IS AGAINST THE WEIGHT OF EVIDENCE AND THEREFORE NOT SUSTAINABLE IN LAW. 2. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT DURING THE YEAR UNDER CONSIDERATION THERE WAS AN AMALGAMATION BETWEEN ASSESSEE COMPANY (PR EVIOUSLY KNOWN AS M / S. SERVE ALL ENTERPRISE SOLUTION LTD) AND M/S DECATREND TECHNOLOGIES PVT LTD WHICH IS A WHOLLY OWNED SUBSIDIARY OF THE ASSESSEE COMPANY AND THAT THE INCOME ARISING TO AMALGAMATED COMPANY WAS INCLUDED IN ASSESSEE'S AND THAT THE TDS DED UCTION IN RESPECT OF AMALGAMATED COMPANY IS CLAIMED IN THE HANDS OF A PP ELLANT . 3. THE LD. CIT(A) HAS ERRED IN NOT PROPERLY APPRECIATING THAT SUBMITTED THAT THE ADVANCE TAX AND TDS CREDIT OF M /S . DECATREND TECHNOLOGIES PVT LTD AND M / S. CES PRIVATE LTD HA VE BEEN TAKEN INTO CONSIDERATION WHILE ARRIVING AT THE TOTAL TAX PAYABLE BY THE ASSESSEE 'IN ITS COMPUTATION WHILE THE INCOME OF BOTH THE COM P ANIES WAS CLUBBED IN THE ASSESSEE'S HANDS. 4. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AO ERRED IN ALLOWING THE CREDIT TO ADVANCE TAX FOR THE LESSER AMOUNT OF RS. RS.80 00 000 / - AS A G AINST THE ACTUAL AMOUNT OF RS. 1 40 00 000 / - TAX EFFECT: RS.60 00 00 0/ - 5. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AO ERRED IN ALLOWING CREDIT TO THE TDS ONLY TO THE EXTENT OF RS. 5 92 604 / - AS A G A INST THE ACTUAL AMOUNT OF RS. 23 12 919/ - TAX EFFECT: RS. 17 20 315 / - 6. THE APPELLANT MAY ADD OR ALTER OR MODIFY OR SUBSTITUTE OR DELETE ADD OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL AT ANY TIME B EFORE OR AT THE TIME OF HEARIN G OF THE A PP EAL. ITA NO.2088/H Y D/2018 AY: 2013 - 14 CES L TD. HYDERABAD 3 2.1. THE LD.COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SUBMI SSIONS MADE BEFORE THE AUTHORITIES BELOW HAD DRAWN OUR ATTENTION TO THE PROFIT & LOSS A/C BALANCE SHEET AND THE COMPUTATION OF INCOME FILED BY ASSESSEE DURING RELEVANT ASSESSMENT YEAR WHICH ARE PART OF THE PAPER BOOK. HE HAS DRAWN OUR ATTENTION TO PAGE 2 OF THE PAPER BOOK WHER EIN TOTAL INCO M E HAS BEEN TAKEN AT RS.4 05 44 580/ - AND THE TDS OF RS.23 12 990/ - AND ADVANCE TAX OF RS.1 40 00 000/ - HAS ALSO BEEN CLAIMED. HE SUBMITTED THAT THIS CONSISTS OF THE TDS CREDIT AND ADVANCE TAX OF THE AMALGAMATING COMPANY AND WHEN THE INCOME OF THE AMALGAMA TING COMPANY HAS BEE N OFFERED TO TAX THEN THE CREDIT FOR TDS AND ADVANCE TAX O F AMALGAMATING COMPANY ALSO MUST BE GIVEN. HE ALSO REFERRED TO THE ORDER OF HONBLE HIGH COURT WHICH IS PLACED AT PAGES 96 TO 112 OF THE PAPER BOOK WHEREIN THE SCHEME OF AMAL GAMATION HAS BEEN APPROVED BY HONBLE HIGH COURT. AT PARA 9.1 OF THE ORDER MEANING OF UNDERTAKING OF THE TRANSFER OR COMPANY IS GIVEN AND AT CLAUSE 1.9.3 IT IS MENTIONED THAT IT SHALL INCLUDE THE LEASING RIGHTS LICENSES APPROVALS EXEM P TI O NS TAX BENEFITS CONCESSIONS SUBSIDIES AND OTHER BENEFICIAL INTEREST ETC. THEREFORE HE SUBMITTED THAT THE HONBLE HIGH COURT HAS ALLOWED THE TAX BENEFITS TO THE AMALGAMATED COMPANY AND THE TDS CREDIT AND CREDIT FOR ADVANCE TAX OF THE AMALGAMATING COMP ANY SHOULD BE GIVEN TO ASSESSEE. 2.2. THE LD.DR HOWEVER SUBMITTED THAT THE DETAILS FURNISHED BY THE ASSESSEE NEED TO BE EXAMINED BY THE A.O. 3. HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD WE AGREE WITH THE CONTENTION OF THE ASSESSEE THAT WHEN THE AMALGAMATED RESULTS OR INCOME OF THE A MALGAMATING COMPANY HAS BEEN TAKEN INTO CONSIDERATION THEN THE CREDIT FOR ADVANCE TAX PAID AND TDS MADE BY AMALGAMATING COMPANY SHOULD BE GIVEN TO AMALGAMATED COMPANY I.E. THE ASSESSEE BEFORE US. 3.1 . IN VIEW OF THE SAME WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF A.O. WITH A DIRECTION TO VERIFY THE CLAIM OF TDS CREDIT AND ADVA NCE TAX PAID BY AMALGAMAT ING COMPANY AND ALLOW THE SAME TO THE ASSESSEE IN ACCORDANCE WITH LAW . ITA NO.2088/H Y D/2018 AY: 2013 - 14 CES L TD. HYDERABAD 4 4 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 21 ST NOVEMBER 2019. SD/ - SD/ - ( MOHAN ALANKAMONY ) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST NOVEMBER 2019. *GMV COPY FORWARDED TO: 1. M/S CES LIMITED C/O P MURALI & CO. CAS 6 - 3 - 655/2/3 SOMAJIGUDA HYDERABAD 500 0 82 . 2. D CIT CIRCLE 1 ( 2 ) HYDERABAD. 3. PR. CIT - 1 HYD. 4. D.R. ITAT HYDERABAD 5. GUARD FILE // C O P Y //