2019 (2) TMI 1535 - AT - Income Tax

Addition on account of foreign exchange gain - Foreign Exchange Monetary Item Translation - foreign exchange gain on Long Term Loan and Advance - Accounting Standard-11 - Foreign Exchange Monetary Item Translation Difference account under the Head Reserves and Surplus - HELD THAT - The loan given to AVML is a capital asset which helps in earning incidental interest income, which is also offered for taxation. Since the loan advanced was its long term asset i.e., on account of capital asset and not as part of circulating capital, therefore, foreign fluctuation gain on account of alteration in the rates of exchange would be a capital accretion. The loan is shown as asset under the Head Long Term Loan and Advance in accounts. The assessee, thus, rightly followed Accounting Standard-11 as explained above. Hence, the loan given by the assessee being a capital asset of the assessee, any loss/gain on account of forex was to be added/subtracted to the loan - no justification for the authorities below to make the addition. Disallowance u/s 14A - Strategic investments - commercial expediency - HELD THAT - The assessee made investments in subsidiary for commercial expediency. It was also explained by assessee that no borrowings were specifically made for the purpose of making investments. Therefore, there is no question of disallowing any expenditure. Considering the above discussion and considering the fact that assessee did not earn any exempt income in assessment year under appeal, therefore, no disallowance under section 14A of the I.T. Act can be made against the assessee. We, accordingly, set aside the Orders of the authorities below and delete the addition. Disallowance of interest considered for demerged entity - HELD THAT - The assessee explained that loan was taken for the purpose of business and it is later on only when some business have been transferred to SPVs of the assessee, the aforesaid issue have been raised for disallowance of interest - the entire amount of loan have been taken for the business purpose of the assessee and the liabilities vests in the books of account of the assessee. Therefore, assessee were liable to pay interest on the same loan. The assessee also explained that all the infrastructure cost was lying with the assessee and that the assessee remain in the business of real estate and for that, the borrowed loan shown in the financials of the assessee has to be first utilised against the cost of the infrastructure. These facts, therefore, clearly prove that assessee utilised the borrowed funds in question for the purpose of business. Therefore, interest paid thereon are allowable deduction in the hands of the assessee u/s 36(1)(iii). Addition on account of interest - LIBOR - TPO raised a query as to why SBI Base Rate 300 bps should not be applied while calculating interest on the said loan funds - HELD THAT - TPO has accepted the CUP method for bench-marking the international transactions, there was no reason for the authorities below to took a different view and apply interest rate of SBI for the purpose of making the addition against the assessee. The assessee also explained that in an unrelated party case, the LIBOR 285 bps was considered, details of which were mentioned in the T.P. study, which would show that the interest rate applied in the case of assessee LIBOR 300 bps is more than sufficient and as such no adjustment on account of ALP is required. The rule of consistency should have been followed by the authorities below while considering the similar transaction in assessment year under appeal. The SBI rate is a local rate and LIBOR is a foreign rate, therefore, LIBOR rate should be preferred as against the SBI local rate of interest. Thus, there were enough explanation given by assessee to show that international transactions of assessee for it s A.E was at arm s length and as such, no further adjustment is required in the matter. We, accordingly, set aside the Orders of the authorities below and delete the addition. Reversal of various provisions considered as income - No deduction was claimed in earlier years - HELD THAT - We are of the view that the matter requires reconsideration at the level of the AO/TPO. The assessee has given the justification for making the provisions to general reserve. The assessee also claimed that the same provision have not been debited to the P & L A/c, therefore, it has no impact on the taxability of the income of the assessee. - Set aside the Orders of the authorities below and restore this issue to the file of AO/TPO with a direction to verify the facts and in case the provisions are not debited to the P & L A/c, addition shall be deleted because assessee has not claimed deduction of the expenditure as per the above explanation. Entry passed in books of account June Allocation - Different accounting year - HELD THAT - The assessee explained that the June Allocation expenses in the financial statement was carried-out because of the fact that accounting year followed by the assessee-company was from July to June but for Income-tax purposes previous year is for the period April to March. Learned Counsel for the Assessee submitted that details were filed before the authorities below and no double deduction have been claimed by assessee. Assessee, rightly contended that this fact may be verified by the AO/TPO. It may also be noted here that except for the month of April to June, 2011, AO has allowed the claim of assessee of the similar expenditure. Therefore, the matter requires reconsideration at the level of the AO/TPO. We, accordingly, set aside the Orders of the authorities below and restore this issue to the file of AO/TPO for verification of the facts and passing the Order afresh. Disallowance on account of consultancy charges paid to Siva Ventures Limited - HELD THAT - The assessee received the maintenance charges fees from SPVs to manage their infrastructure. In this regard, agreement was executed with the SVL. Thus, it is clear that assessee obtained the large amount as income from the construction business and when assessee has obtained consultancy charges for the entire project and was also receiving maintenance charges fees from SPVs, it would show that entire expenditure should have been allowed as deduction in the hands of the assessee. Since the proportionate disallowance have been made by the authorities below, therefore, it is not a case that assessee did not file all the documentary evidences before the authorities below. Considering the totality of the facts and circumstances of the case in the light of explanation of assessee, we are of the view that entire consultancy charges should be allowed in the hands of assessee-company. We, accordingly, set aside the Orders of the authorities below and allow the entire deduction. Addition from advance from customer - HELD THAT - The assessee explained that the amounts in question are the advances received from the parties and in some of the cases, registration of the properties were done in subsequent year. Therefore, the amounts have been offered for taxation in subsequent year. In some cases, construction was not completed. Therefore, amount was treated as advance. These facts are available on record of the Department in subsequent year as well for offering the same amount for taxation. According to the Learned Counsel for the Assessee, all details were submitted before authorities below, therefore, matter requires reconsideration. Further, the assessee did not file any appeal against the addition of ₹ 31,23,109/- on account of Sundry Parties. Therefore, addition to that extent is maintained and for the rest of the amount, issue is restored to the file of AO/TPO for fresh adjudication. Capital expenditure debited to P & L A/c - AO has proposed disallowance of the above amount on account of capital expenditure debited to the P & L A/c during the assessment year under appeal - HELD THAT - The assessee has explained that work-in- progress was written-off because it was not found physically at the site and that land was written-off because it was provided to Forest Department as compensation to utilize Forest Land in Lonavala. This is certified by the Auditor and for the rest of the amount incurred on repair and maintenance, according to explanation of assessee, show cause notice was given for part amount, but addition was made on substantial amount, without giving opportunity of being heard to the assessee. These facts, therefore, show that explanation of assessee requires reconsideration. We accordingly, set aside the Orders of the authorities below and restore this issue to the file of AO/TPO for fresh adjudication. T.D.S credit - HELD THAT - Since part of the interest income is assessable in the hands of assessee-company, therefore, assessee-company would get credit of the TDS certificate to that extent only. The DRP, therefore, rightly directed the AO to allow credit as per Rule 37BA(3) of the I.T. Rules. Since the SPVs have declared part of the interest income in their return of income, therefore, Learned Counsel for the Assessee rightly contended in the alternative contention that they will be given credit of the TDS which was in the name of the assessee-company. Since the entire amount of the tax is lying with the Income Tax Department and the TDS certificate was in the name of the assessee-company, therefore, the authorities below are directed to grant TDS credit on the part amount of the interest which is available for tax by the SPVs. The credit of the TDS shall be allowed in the names of the companies who have offered it as income in their respective return of income. Sundry balances written off - Business loss - HELD THAT - The matter could be remanded to the AO/TPO for fresh adjudication of the matter. The explanation of assessee clearly suggest that it may be a case of business loss because whatever amounts were given during the course of business activities could not be recovered by the assessee. The entries to that effect have been made in the paper book. Since it is a case of Special Audit and explanation of assessee was before authorities below, therefore, one more chance could be given to assessee to produce the documentary evidences before AO/TPO for final adjudication of the matter. We, accordingly, set aside the Orders of the authorities below and restore this issue to the file of AO/TPO. Non-deduction of TDS - disallowance of expenditure for non-deduction of TDS - HELD THAT - According to second proviso to section 40(a)(ia), if amount which is in dispute has already been offered to tax by the deductee, assessee could not be deemed to be assessee in default. The assessee relied upon decision of Hon ble High Court in the case of CIT vs. Ansal Landmark Township (P) Ltd. 2015 (9) TMI 79 - DELHI HIGH COURT in which it was held that the said proviso is curative and retrospective in nature. Payee filing return of income tax and offering the same received for taxation, therefore, no disallowance was made. Merely because SLP of the department is pending, is no ground for not following the decision of the jurisdictional High Court. In this view of the matter, we set aside the Orders of the authorities below and restore this matter in issue to the file of AO/TPO with a direction to re-examine this issue. Cash expenditure though agent disallowance u/s 40A(3) - Rule 6DD - HELD THAT - Part payment disallwance as not covered by Rule 6DD - For purchase of land assessee explained that the said party M/s. Aishwarya Enterprises has made further payment to the farmers, partly in cash and partly through cheque. Therefore, these were independent agreements between Assessee and M/s. Aishwarya Enterprises and further between M/s. Aishwarya Enterprises and Farmers (sellers). Therefore, there is no violation in the case of assessee as no cash payment have been made by the assessee. Even in case, it may presume that payment is made on behalf of assessee partly in cash through M/s. Aishwarya Enterprises, Rule 6DD(k) (supra) would allow because where the payment is made by any person to his Agent who is required to make payment in cash for goods or services on behalf of such person, then, there would be no violation of provisions of Section 40A(3). The genuineness of the payment to M/s. Aishwarya Enterprises have not been doubted by the authorities below, therefore, in such circumstances, there would be no violation of Section 40A(3). Notional interest on advance - Surplus fund - No interest charged on loan - HELD THAT - The assessee produced copies of the MOU through which advance was given for the purpose of business to M/s. Charita City Homes Jaunpur Pvt. Ltd. There is no provision under the Income-tax Act to make addition on account of charging of notional interest. The assessee also explained that it has availability of sufficient funds, therefore, when amount of advance have been given out of the capital and reserves available with the assessee, there is no question of charging notional interest on the advance. Complete details are available on record which have not been rebutted through any evidence or material on record, therefore, there were no justification to make the above addition. Notional interest on Long outstanding imprest - AO proposed to make the impugned addition on account of notional interest @ 12% on the advance - HELD THAT - Since assessee has sufficient funds available with it and if advance given out of the same, then, no addition on account of charging of notional interest could be made. We, accordingly, set aside the orders of the authorities below and delete the addition. Diversion of interest bearing funds - HELD THAT - The assessee also explained that prior to it assessee had received interest free funds from SICCL. The balance left over with the assessee was parked in the FDs. Against this FD, OD was obtained from the Bank. Since the source of the advance money to SASL was interest free fund received from SICCL, therefore, there is no question of disallowance of interest against the assessee. Further, assessee has sufficient funds as noted in the Ground No.20, therefore, it would prove that assessee make advances even out of the free funds available with it. The totality of the facts and circumstances of the case and explanation of assessee clearly show that assessee made investments in group company for business purposes, therefore, addition is wholly unjustified. Disallowance of development charges as excessive - wholly and exclusively for the purpose of business - HELD THAT - Responsibility as explained in the MOU upon the said party was with reference to procurement of the land with clear title. It has no connection with the development work which has assigned to the party separately. As per the invoices issued by M/s. Aishwarya Enterprises for payment of business expenditure, the amount was spent by them with regard to leveling, fencing, construction of compound wall, bush cutting etc. These terms are nowhere mentioned in the MOU. Therefore, addition was made on wrong premise against the assessee. It may also be noted here that the authorities below have allowed 50% of the expenditure and as such genuineness of the same incurring of the expenditure have not been doubted - the amount on development work have been incurred by the assessee was wholly and exclusively for the purpose of business which is different from the details mentioned in the MOU. Additions delted Disallowance of business and administrative expenditure - HELD THAT - the matter requires reconsideration at the level of the AO/TPO. Learned Counsel for the Assessee submitted that complete details were filed before AO and is also noted by the DRP in the order. He has, therefore, suggested that matter may be remanded to the AO/TPO for fresh adjudication which is also not disputed by the Ld. CIT-D.R. Disallowance of Commission and brokerage expenses - AO observed that assessee has failed to justify the claim of the expenditure - HELD THAT - We are of the view that the matter requires reconsideration at the level of the AO/TPO. PB-524 is invoice dated 12.01.2012 though in the name of Aamby Valley City, but it was with respect to commission for Aamby Valley Limited. Further, details with regard to brokerage paid to Colliers International (India) Property Services Ltd., the assessee explained that this property was obtained on rent and it was used for the purpose of business. Therefore, commission and brokerage was paid for the same. The details have not been examined by the authorities below. We are, therefore, of the view that the matter requires reconsideration at the level of the AO/TPO. Disallowance of advertisement and sales promotion and business promotion expenses - AO proposed the above disallowance on account of advertisement and sales promotion and business promotion expenses - HELD THAT - The assessee-company has sponsored the events of Indian Bridal Week and Vivah Home Exhibition . The assessee explained that these events were meant for promotion of its Brand Aamby Valley . The assessee also explained that its turnover have increased due to this programmes and as such the amount was incurred wholly and exclusively for the purpose of its business. It is well settled Law even if third party has got benefit out of the expenditure incurred, the deduction under section 37(1) cannot be denied to the assessee - restore this ground of appeal to the file of AO/TPO for fresh adjudication Disallowance of prior period expenses - liability crystallized during the assessment year under appeal - HELD THAT - We are of the view that the matter requires reconsideration. The assessee claimed that it has not made any claim of expenditure in earlier year and that appeal is filed for deduction of the aforesaid amount only. The assessee claimed that the amount was crystallized during the assessment year under appeal. Therefore, it is an allowable deduction. No findings have been given by the AO on this issue despite directions given by the DRP to verify the claim of the assessee and in case expenses have crystallized in assessment year under appeal, then issue may be allowed in favour of the assessee. Addition on account of property tax paid by the assessee, but bill not in its name - HELD THAT - Now the property tax has been paid of the same property by the assessee. Therefore, this fact could be verified by the AO/TPO and thereafter pass a reasoned order on the same. We, accordingly, set aside the Orders of the authorities below and restore this issue to the file of AO/TPO with a direction to re-adjudicate the issue Addition of business and administrative expenditure - Verification of bills & documentary evidences - Assessee submitted that complete details were filed before the authorities below which have not been considered and that complete details are mentioned even in the order of the DRP - HELD THAT - We set aside the Orders of the authorities below and restore this issue to the file of AO/TPO with a direction to re-decide this issue as per Law by verifying the facts from record by giving reasonable, sufficient opportunity of being heard to the assessee. Disallowance of interest on delayed payment of indirect tax - HELD THAT - We are of the view that the interest paid in respect of delay in payment of indirect tax i.e., Service Tax and VAT is not penal in nature. Addition to be deleted Disallowance of consultancy charges paid - AO observed that the expenditure was not relatable to assessee s business as the expenditure relates to aviation activity which have been transferred to business SPVs - HELD THAT - This fact may be verified and in case this expenditure is connected with business SPVs, same could not be allowed in the case of assessee. However, the same is allowable in the hands of SPVs. AO shall pass Order accordingly, by giving reasonable, sufficient opportunity of being heard to the assessee. Ground No.23(i) of the appeal of Assessee is allowed for statistical purposes. Disallowance of professional charges - Charges paid for defending criminal case against an employee of the assessee - AO observed that expenses related to defending criminal case against an employee filed by a guest who visited assessee s place can not be said to be business expenditure - HELD THAT - The crime is always committed by a person and in the present case, offence of rape is committed by an employee in his personal capacity, therefore, it could not be treated that the amount paid to a criminal lawyer to defend an employee was incurred for business purpose. The authorities below, therefore, correctly denied the deduction of the same. Increase in general reserve due to Composite Scheme of Arrangement and Amalgamation taxable u/s 28(iv) -condition for amalgamation - HELD THAT - In our view, the net increase in the general reserve of the assessee-company is neither a benefit nor a perquisite nor it is arisen out of carrying on of the business or profession by the assessee. The transaction of Composite Scheme of Arrangement and Amalgamation cannot be regarded to be the one carried into during the course of carrying on the business. We, therefore, hold that provisions of Section 28(iv) is not applicable to the facts and circumstances of the case. - Issue decided in favour of assessee. Investment received on Composite Scheme of Arrangement and Amalgamation considered as income u/s 56(2)(viia) - - condition for amalgamation - Section 47(vii) as amended by Finance Act 2012 is retrospective in nature - HELD THAT - in view of the para-II of the Composite Scheme of Arrangement and Amalgamation, various undertakings will first vest in various SVPs, but, subsequently due to the applicability of Para-III of the Scheme, the holding Company of all the SVPs i.e., AVVPL got amalgamated into the assessee-company and all the assets and liabilities of the amalgamating company, immediately before the amalgamation becomes the property and liability of the assessee-company by virtue of the amalgamation and due to the simultaneously retrospective amendment to Section 47(vii) and in Section 2(1B) which defines the amalgamation. The condition of amalgamation is, therefore, stands complied with in this case since the merging of AVVPL into the assessee-company, in our view, complied with all the three conditions as stipulated in the definition of the amalgamation, it cannot be said that it is not a case of amalgamation. No bonus shares have been issued out of general reserve. We, therefore, hold that provisions of Section 56(2)(viia) cannot be applied in respect of this transaction as it is a case where the transfer in the case of assessee falls under section 47(vii) of the Income-Tax Act. - Issue decided in favour of assessee. Balance sheet as on 31st March 2011 has to be considered as per the rules. The valuation date has been defined to be the date on which property has been received by the assessee. As per the Composite Scheme, the assessee has received the property as on 31st March 2011, therefore, the balance sheet as on 31st March 2011 has to be considered. The appointed date as fixed by the Honourable High Court is also the closing hours of the business on 31st March 2011 , therefore, in our view, the balance sheet as on 31st March 2011 has to be considered for the purpose of determining the value of the property under Rule-11UA of the I.T. Rules. MAT computation - HELD THAT - Honorable Supreme Court in the case of Apollo Tyres Limited 2002 (5) TMI 5 - SUPREME COURT , held that once accounts including profit and loss account are certified by the authorities under the Companies Act, it is not open to the Assessing Officer to contend that profit and loss account has not been prepared in accordance with the provisions of the Companies Act and dismiss the departmental appeal. The decisions relied upon by the Ld. D.R. would not support the case of the Revenue. Honorable Bombay High Court in the case of CIT vs. Bisleri Sales Limited 2015 (11) TMI 388 - BOMBAY HIGH COURT had taken the same view. These decisions are applicable to the facts of this case as in the case of the assessee also, the DRP while making the addition under section 115JB of the I.T. Act, 1961, took the view that the assessee should have routed the increase in the general reserve through profit and loss account, but, in this case also similar arguments have been rejected by the Honorable Bombay High Court. In view of the above, we delete the addition made under section 115JB

Summary

Issues Involved:
1. Disallowance of Proportionate Consultancy Charges
2. Addition on Account of Advances from Customers
3. Disallowance of Capital Expenditure Debited to P&L Account
4. Disallowance of TDS Credit
5. Addition on Account of Sundry Balances Written Off
6. Disallowance for Non-Deduction of TDS
7. Disallowance under Section 40A(3)
8. Addition of Notional Interest on Advances
9. Addition of Long Outstanding Imprest
10. Disallowance of Interest Expenditure
11. Addition on Account of Development Charges
12. Addition of Certain Business and Administrative Expenditure
13. Disallowance of Commission and Brokerage Expenses
14. Disallowance of Advertisement and Sales Promotion Expenses
15. Disallowance of Prior Period Expenses
16. Addition of Property Tax Paid
17. Disallowance of Business and Administrative Expenditure without Documentary Evidence
18. Disallowance of Interest on Indirect Tax
19. Disallowance of Consultancy Charges Paid to Air One Aviation Pvt. Ltd.
20. Disallowance of Professional Charges for Defending Criminal Case
21. Taxability under Section 28(iv) and Section 56(2)(viia) due to Composite Scheme of Arrangement and Amalgamation

Issue-wise Detailed Analysis:

1. Disallowance of Proportionate Consultancy Charges:
The AO disallowed consultancy charges paid to Siva Venture Limited (SVL) on a proportionate basis due to the transfer of some businesses to SPVs. The DRP upheld the disallowance. The Tribunal allowed the entire deduction, noting that the consultancy services were necessary for managing the large project and maintaining infrastructure for SPVs.

2. Addition on Account of Advances from Customers:
The AO added ?9.33 crores due to outstanding balances from customers. The DRP upheld the addition due to a lack of satisfactory evidence. The Tribunal remanded the matter to the AO/TPO for reconsideration, maintaining the addition of ?31,23,109/- for Sundry Parties.

3. Disallowance of Capital Expenditure Debited to P&L Account:
The AO disallowed ?8.75 crores on account of capital expenditure, citing a lack of justification and documentary evidence. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, noting that the explanation provided by the assessee required reconsideration.

4. Disallowance of TDS Credit:
The AO disallowed excess TDS credit of ?1,92,20,596/-. The Tribunal directed the authorities to grant TDS credit on the part amount of interest offered for tax by SPVs, as the entire tax was lying with the Income Tax Department.

5. Addition on Account of Sundry Balances Written Off:
The AO disallowed ?93,68,898/- due to a lack of documentary evidence. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, allowing the assessee to produce documentary evidence.

6. Disallowance for Non-Deduction of TDS:
The AO disallowed ?79,19,474/- for non-deduction of TDS. The Tribunal remanded the matter to the AO/TPO for reconsideration in light of the assessee's explanation and the judgment of the Delhi High Court in CIT vs. Ansal Landmark Township (P) Ltd.

7. Disallowance under Section 40A(3):
The AO disallowed ?39,58,925/- and ?13,55,918/- under Section 40A(3) for cash payments. The Tribunal upheld the disallowance of ?13,55,918/- but deleted the addition of ?39,58,925/-, noting that the payments were made through cheques and were genuine.

8. Addition of Notional Interest on Advances:
The AO added ?6.24 crores as notional interest on an advance of ?52 crores. The Tribunal deleted the addition, noting that the advance was for business purposes and the assessee had sufficient funds.

9. Addition of Long Outstanding Imprest:
The AO added notional interest on an advance of ?34,57,864/-. The Tribunal deleted the addition, noting that the assessee had sufficient funds and the advance was for business purposes.

10. Disallowance of Interest Expenditure:
The AO disallowed ?90,13,188/- for diversion of interest-bearing funds. The Tribunal deleted the addition, noting that the investment in the sister concern was for business purposes and the assessee had sufficient funds.

11. Addition on Account of Development Charges:
The AO disallowed 50% of the development charges paid to M/s. Aishwarya Enterprises. The Tribunal deleted the entire addition, noting that the development work was different from the work mentioned in the MOU and was genuine.

12. Addition of Certain Business and Administrative Expenditure:
The AO disallowed ?6,20,30,371/- due to a lack of documentary evidence. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, allowing the assessee to provide evidence.

13. Disallowance of Commission and Brokerage Expenses:
The AO disallowed ?1,13,81,000/- due to a lack of justification. The Tribunal remanded the matter to the AO/TPO for verification of the details provided by the assessee.

14. Disallowance of Advertisement and Sales Promotion Expenses:
The AO disallowed ?1,08,81,770/- on a proportionate basis. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, noting that the expenses were incurred for business promotion.

15. Disallowance of Prior Period Expenses:
The AO disallowed ?39,66,711/- on account of prior period expenses. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, allowing the assessee to provide evidence.

16. Addition of Property Tax Paid:
The AO disallowed ?29,66,510/- due to the bill not being in the assessee's name. The Tribunal remanded the matter to the AO/TPO for verification of the facts.

17. Disallowance of Business and Administrative Expenditure without Documentary Evidence:
The AO disallowed ?18,18,684/- due to a lack of documentary evidence. The Tribunal remanded the matter to the AO/TPO for fresh adjudication, allowing the assessee to provide evidence.

18. Disallowance of Interest on Indirect Tax:
The AO disallowed ?5,86,819/- on account of interest on indirect tax. The Tribunal deleted the addition, noting that the interest was compensatory and not penal.

19. Disallowance of Consultancy Charges Paid to Air One Aviation Pvt. Ltd.:
The AO disallowed ?5,51,500/- as the expenditure was not related to the assessee's business. The Tribunal remanded the matter to the AO/TPO for verification.

20. Disallowance of Professional Charges for Defending Criminal Case:
The AO disallowed ?3 lakhs for defending a criminal case against an employee. The Tribunal upheld the disallowance, noting that the expense was not incurred for business purposes.

21. Taxability under Section 28(iv) and Section 56(2)(viia) due to Composite Scheme of Arrangement and Amalgamation:
The AO made additions under Section 28(iv) and Section 56(2)(viia) due to the Composite Scheme of Arrangement and Amalgamation. The Tribunal deleted the additions, noting that the scheme was effective from the appointed date (31st March 2011) and not the assessment year under appeal. The Tribunal also held that the provisions of Section 28(iv) and Section 56(2)(viia) were not applicable in this case.