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Issues involved: Assessment of a closely held company for assessment year 2000-01, disallowance of expenditure u/s 14A, genuineness of loans, and validity of assessment order after company's name was struck off from the register of Registrar of Companies.
Assessment and Disallowance: The assessment of the company was done u/s 147 r.w.s 143(3) of the Act, resulting in various additions to the total income including an increase in share capital, unsecured loan, interest, service charges, investments, electronic transfer charges, office maintenance, and disallowance u/s 14A. The ld. CIT(A) provided partial relief to the assessee, who further challenged the assessment order, claiming it to be bad in law due to the company's name being struck off from the register of companies before the assessment order was passed. Validity of Assessment Order: The additional ground raised by the assessee questioned the validity of the assessment order, arguing that assessing a non-existing entity renders the assessment a nullity. Reference was made to a decision by the Delhi Bench of the ITAT in a similar case. The Revenue disputed this contention, stating that the company's name was rectified through a Gazette Notification after the assessment order was passed. The Tribunal found the facts unclear and directed the Assessing Officer to verify if the company was in existence at the relevant time. If found non-existent, the assessment order would be invalid, otherwise, further proceedings could continue. Conclusion: Both appeals were allowed for statistical purposes, and the matter was remanded to the Assessing Officer for verification of the company's existence at the time of assessment. The Tribunal emphasized that if the company was not in existence, the assessment order would be null and void, and no further action could be taken.
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