9911796707
TMI Blog2015 (3) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... t the shares in the successor company stood allowed to the erstwhile partners in their profit sharing ratio in the firm, the ld. CIT(A) found it as not so; the shares being allocated in the ratio of their capital balances as on the date of the conversion, i.e., in terms of section 47(xiii). Both the conversion deed and the allocation of shares, as well as the firm’s balance-sheet, both as on 31.03.2006 and 01.4.2006, were before the A.O., whose objection was on merits. Qua merits, the conversion deed clearly states that the partners shall be allotted shares as per the profit sharing ratio as on the date of conversion (i.e., 01.04.2006) (refer clause 2). With regard to the allotment, the actual allotment would prevail over that specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after) for the assessment year (A.Y.) 2007-08 vide order dated 28.12.2010. 2. At the outset, we observe the C.O. to be delayed by 236 days; having been filed on 18.02.2014, as against the due date of 26.06.2013 (proof of receipt of Memorandum of Appeal in Form 36 being served on the assessee on 27.05.2013 on record). The condonation petition, since filed, states the demise of Shri Prashant Dave, Chartered Accountant, handling the affairs of the firm, and Shri Premji Viram Satra, partner, as a reason for the delay in filing the cross objection, raising a legal issue, which stood also raised before the first appellate authority. After preliminary hearing, we find the delay as on account of genuine and sufficient reasons and, hence, fit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into a company. In appeal, the assessee found favour with the ld. CIT(A). The shares in the successor-company had been issued to the erstwhile partners in the ratio of their capital balances as at the close of 31.03.2006. The Assessing Officer (A.O.) had wrongly compared the same with the capital balances as on 31.03.2007, which is not relevant; the relevant date being that immediately prior to succession on 01.04.2006, i.e., 31.03.2006. In fact, even though further shares were subsequently issued to the partners, making the shareholding of each of the three groups (of partners) equal, at 10 lac shares each, the aggregate holding of the partners is 100% of the shareholding in the company, while the legal requirement is for them to contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2009 and 03.11.2009 were not valid in law. The assessee s return of income filed on 20.11.2009 could not be considered to be in response to notice u/s. 142(1) dated 07.01.2009 and, in any case, as a valid return in law. The issue of notice u/s. 143(2) on 20.11.2009, i.e., in pursuance to the said return, was consequently invalid. Accordingly, the A.O. s action in issuing notice u/s.148 on 14.12.2009, in the wake of the assessee failing to file the return of income even by the extended period allowed u/s.139(4), was thus a valid notice in law. The assessee s claim that the ensuing proceedings were not valid in-as-much as the A.O. was bound to frame the assessment u/s.143(3), taking the proceedings initiated by issue of notice u/s.143(2) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not therefore be taken cognizance of, so as infer the allocation as being not in terms of section 47(xiii) of the Act. 5. We have heard the parties, and perused the material on record. The Revenue s principal objection, raised per its Gd. # 1, is that the ld. CIT(A) had, in allowing relief to the assessee, admitted additional evidence, in contravention of Rule 46A of the Income Tax Rules, 1962 (the Rules ). The said rule, procedural in character, is yet mandatory. However, we consider the Revenue s charge as not valid. This is for the simple reason that while the A.O. s objection, with reference to the terms of the conversion deed dated 01.04.2006, was that the shares in the successor company stood allowed to the erstwhile partners in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
