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TMI Blog2010 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... hereto. The income derived by M/s Minicon from subletting the said premises was found to be exorbitant by the A.O. as compared to the rent paid by the said company to the assessee company. It was also noted by the A.O. that while the rent received by M/s Minicon had increased from year to year, the rent received by the assessee company from M/s Minicon remained fixed. Keeping in view these facts as well as other facts of the case, the agreement between the assessee company and M/s Minicon was treated by the A.O. as sham alleging that the same was entered into with the intention to divert taxable income of the assessee company to its group company M/s Minicon. Accordingly, the entire rent charged by M/s Minicon was taken by the A.O. as the fair market value of the property let out by the assessee company to M/s Minicon and accordingly addition was made to the total income of the assessee. The said addition was confirmed by the ld. CIT(A) as well as by the Tribunal. Thereafter, an application dated 23.7.2007 was moved by the assessee company before the A.O. u/s 154 claiming that the entire rental income received by M/s Minicon from third parties having been assessed to tax in its han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, on the other hand, were two distinct companies assessable separately in their respective income and there was no provision in the 1961 Act similar to the provisions of section 14(1) of the 1922 Act prohibiting the income of one company to be taxed in the hands of another company. He also held that there were no provisions in the Act by which the credit for taxes paid by M/s Minicon could be given to the assessee company. He, therefore, held that the ratio of the decision of Hon'ble Supreme Court in the case of Bachu Lal Kapoor (supra) was not applicable in the facts of the assessee's case and there was no mistake apparent from record as alleged by the assessee company in its applications which could be rectified u/s 154. Accordingly, the orders passed by the A.O. dismissing the applications filed by the assessee u/s 154 were upheld by the ld. CIT(A). Aggrieved by the order of the ld. CIT(A), the assessee has preferred these appeals before the Tribunal. 5. The ld. Counsel for the assessee submitted that the property owned by the assessee company at Vidya Vihar was let out to M/s Minicon and the rent received from the said tenant as per the agreement was duly offered by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. He also submitted that the assessment completed in the case of M/s Minicon assessing the rental income and giving credit for taxes paid thereon has not been disturbed and the same has already become final. He contended that the claim of the assessee for credit on account of said taxes paid by M/s Minicon is not supported even by the decision of Hon'ble Supreme Court in the case of Bachu Lal Kapoor (supra) being distinguishable on facts as rightly pointed out by the ld. CIT(A) in his impugned order. He also contended that the issue relating to the said claim of the assessee in any case is an highly debatable issue and in the absence of any provision in the Act supporting the said claim, it is beyond the scope of section 154. He, therefore, strongly supported the impugned order of the ld. CIT(A) upholding the orders passed by the A.O. dismissing the applications filed by the assessee u/s 154. 7. We have considered the rival submissions and also perused the relevant material on record. It is observed that the credit for taxes paid by M/s Minicon on rental income received by the said company from third parties out of subletting has been claimed by the assessee as a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members, a proper assessment has to be made on the HUF in respect of that income and the Revenue has to make the appropriate adjustments. It was held by the Hon'ble Supreme Court that if the assessment proceedings initiated u/s 34 of the Act culminate in the assessment of the HUF, appropriate adjustments have to be made by the A.O. in respect of tax realized by the Revenue in respect of that part of income of HUF which was assessed in the hands of individuals. It is thus clear that the issue involved before the Hon'ble Supreme Court was with regard to taxing the income in the hands of individuals vis-a-vis HUF and keeping in view the express provisions contained in section 14(1), it was held by the Hon'ble Apex Court that the said income could not be taxed twice in the hands of HUF as well as its members. 8. In the present case, the assessee company and M/s Minicon are two distinct companies which are separately assessed to tax in respect of their income and there is no provision in the 1962 Act akin to section 14(1) of 1922 Act which expressly prohibits the income of one such company to be taxed in the hands of another company. Moreover, a perusal of the order of the Tribunal da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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