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TMI Blog2009 (11) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the loss of ₹ 2,83,85,937/-, disallowed by the Assessing Officer, while framing the assessment. 4. The facts, in brief, are that the returned income was shown Nil by the assessee company after setting off brought forward losses to the tune of ₹ 2,83,85,937/-. The A.O. required the assessee to explain regarding the eligibility of such set off. The assessee submitted that the quantum of carry forward loss and unabsorbed depreciation was subject to pending assessment/appeals for earlier years. It was also submitted that the Company was liable to pay tax on book profit u/s 115JA. The assessee also submitted the details of assessment of earlier years, which, in the opinion of A.O., revealed that in the earlier years of unabso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled beyond the statutory limit, hence, violation of provisions of Section 80 of the Act. He further held that business activities and production activities of M/s. Shri Ram agro Tech Industries Limited had been closed before amalgamation and the amalgamated entity ( the assessee) basically carried forward the losses of erstwhile Shri Ram Agro Tech Industries Limited merely for taking advantage of the same in the assessment year after its disposing of the fixed assets of Company and hence, in A. Y. 1999-2000, it had no further existence and, therefore, for this reason, the assessee was not eligible for set off losses pertaining to Shri Ram Agro Tech Industries Limited suffered by that Company in assessment year 1993-94 to 1997-98. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased company subsequently merged. Accordingly, contention of the appellant for set off of brought forward losses, as per assessments for the company based at Bhopal, namely, Shriram Agro Tech Industries Limited is correct. The assessments for the amalgamating and amalgamated companies were made separately up to the assessment year 1996-97. It would be relevant to mention at this juncture, the CBDT Circular no. 779 on the subject Finance Act, 1999, explanatory Notes on the provisions relating to direct taxes quoted here under :- (xxi) Section 72 of the Income-tax Act, 1961, relating to carry forward and set off of business loss has been amended deleting the proviso to clause (i) of sub Section (1) which stipulated that the business or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the authorities below. 9. It is noted that the return of both amalgamating and amalgamated company have been filed within the time period specified u/s 139(1). It is also noted that consolidated return of the amalgamated entity has been filed for the assessment year 1997-98, after amalgamation being approved by the concerned Hon'ble High Courts. Thus, in our opinion, in these circumstances, the assessee cannot be expected to do an impossible thing i.e. filing of return of amalgamated entity before it is coming into legal existence and, therefore, such return should relate back to the original returns filed by these companies individually. It is not in dispute that original returns have been filed within the time specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and placed reliance on the order of the AO. The ld. counsel for the assessee, on the other hand, placed strong reliance on the order of the ld. CIT(A). 14. On due consideration of facts and circumstances of the issue on hand, we find that it is a case of disallowance by the Assessing Officer without any basis or specific defects being pointed out. Hence, we hold that the Ld. CIT(A) has rightly deleted such addition. Thus, this ground of the Revenue is also dismissed. 15. In ground no.3, the Revenue is aggrieved by the decision of the Ld. CIT(A) in deleting the disallowance of ₹ 3,88,474/- made by the Assessing Officer out of preliminary expenses. 16. The facts, in brief, are that the A.O. examined the claims made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation was not allowable. 21. The Ld. CIT(A), however, on appeal by the assessee, held that lease rent had been earned during year under consideration and these assets had been owned by the assessee, therefore, the assessee s claim for depreciation was allowable. Aggrieved by this, the Revenue is in appeal before us. 22. The ld. DR narrated the facts and placed reliance on the order of the AO. The ld. counsel for the assessee, on the other hand, placed strong reliance on the order of the ld. CIT(A). 23. We have considered the submissions made by both the sides, material on record and the orders of the authorities below. 24. It is noted that the A.O. has disallowed the impugned depreciation for the reason that he was of the opin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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