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TMI Blog2018 (8) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... being disposed off by this consolidated order for the sake of convenience and brevity. 3. At the first instance, we will deal with the appeal in ITA No. 2073/Del/2014 for the assessment year 2009-10. Following grounds have been raised in this appeal: "1. That the Assessment Order passed in pursuance to the directions issued by the Learned Dispute Resolution Panel ('DRP') is a vitiated order as the Ld. DRP has erred both on facts and in law, in not considering the submissions made by the Appellant and in confirming the addition made by the Ld. Assessing Officer ('AO')/ Ld. Transfer Pricing Officer ('TPO') to the Appellant's income. 2. That on the facts and circumstances of the case and in law, the Ld. AO [following the directions of Learned Dispute Resolution Panel ("Ld. DRP")] erred in assessing the returned loss of the appellant of ₹ 49,664,891 at the income of ₹ 65,58,117. 3. The Ld. Transfer Pricing officer (TPO)/ Ld.DRP erred on facts and circumstances of the case and in law by confirming an Transfer Pricing adjustment amounting to INR 56,223,008 holding that the international transaction pertaining to provision of contract rese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arms length nature of international transactions pertaining to the payment of administration fee. 4.4 the support services are in the nature of stewardship as it result into benefit to the AEs and such coordination actuary is required to be carried out by the parent companies to improve its global presence and global profit. 5. The Ld. AO/ Ld. DRP erred in enhancing the income of the Appellant on account of interest on overdue receivables by ₹ 11,56,859 without stating any cogent reasons and basis for interest calculation. The Ld TPO grossly erred in charging interest to the receivables which were outstanding in ordinary course of business and has been collected in a reasonable period and in doing so grossly erred in law and in facts for the following reasons: 5.1 applying an arbitrary interest rate of 14.25 percent (lending rate of SBI plus 150 basis points) for calculating interest on outstanding receivables. 5.2 not considering the fact that the amount outstanding in the name of AEs represents the normal course of business activity and looking into the commercial expediency of the business, this situation prevails for both receipts and payments to/from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO / DRP / TPO, have framed / passed orders on the erstwhile entity i.e. Akzo Nobel Car Refinishes India Private Limited. The orders, thus, passed by the lower authorities are bad in law and void ab initio as the same have been passed on a non-existent entity. Further, it is respectfully submitted that the issue involved in the said additional ground of appeal also stands covered in favor of the Appellant by the jurisdictional High Court's decision in the case of Spice Entertainment Limited vs Commissioner of Service Tax (ITA 475, 476 of 2011) (Delhi), which has now been affirmed by the Hon'ble Supreme Court vide order dated November 2, 2017 in CA No. 285 of 2014. Reliance is also placed upon the following judicial precedents: * Akzo Nobel Chemicals (India) Ltd. (merged with Akzo Nobel India Limited) Vs. The Dy. Commissioner of Income Tax [ITA No.l225/PUN/2015] - Hon'ble Pune ITAT * CIT(C)-II Vs. Micra India Pvt. Ltd. [ITA 441, 444, 445, 446, 452, 461 of 2013] -Hon'ble Delhi High Court * DCIT Vs. Transcend MT Services Pvt. Ltd. [ITA No. 2697/Del/2014] - Hon'ble Delhi ITAT * Genpact Infrastructure (Bhopal) Pvt. Ltd., (now merged with Genpa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oints Particulars Remarks 1. Amalgamation effective from: April 1, 2011 2. Facts of merger brought to notice of AO Yes (vide letters dated June 11, 2012, filed before AO's office on June 19, 2012) Attached as Annexure 2 along with the additional ground of appeal 3. Date of passing draft assessment order March 12, 2013 Passed in the name of erstwhile entity, i.e. Akzo obel Car Refinishes India Pvt. Ltd., without any mention of the transferee entity's name, i.e. Akzo Nobel India Limited. (refer pages 121 of appeal set) 4. Date of transferpricing order January 4, 2013 Passed in the name of erstwhile entity, i.e. Akzo Nobel Car efinishes India Pvt. Ltd., without any mention of the transferee entity's name, i.e. Akzo Nobel India Limited. (refer page 124 of the appeal set) 5. Date of DRP directions December 24, 2013 Passed in the name of erstwhile entity, i.e. Akzo Nobel Car Refinishes India Pvt. Ltd., without any mention of the transferee entity's name, i.e. Akzo Nobel India Limited. (refer page 11 of the appeal set) 6. Date of final assessment order January 31, 2014 Passed in the name of erstwhile entity, i.e. Akzo Nobel Car Refin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twhile entity i.e. Akzo Nobel Car Refinishes India Ltd. without any mention of the transferee entity name i.e. Akzo Noble India Ltd. From the aforesaid narrated facts, it is clear that the assessment has been framed by the AO on an entity which was not in existence after the order dated 18.04.2012 passed by the Hon'ble High Court of Karnataka at Bangalore, copy of which is placed at page nos. 2 to 37 of the assessee's compilation. 12. It is noticed that an identical issue having similar facts has been decided by this bench of the Tribunal wherein one of us (Accountant Member is the author) in ITA No. 2025/Del/2014 for the assessment year 2009-10 in the case of M/s Genpact Infrastructure (Bhopal) Pvt. Ltd. (now merged with Genpact India) Vs DCIT, Circle-12(1), New Delhi (supra) wherein the relevant findings have been given in paras 8 to 14 of the order dated 09.02.2018 which read as under: "8. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the assessee M/s Genpact Infrastructure (Bhopal) Pvt. Ltd. amalgamated with M/s Genpact India in pursuant to the order dated 19.11.2010 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference was made by the AO u/s 92CA(1) of the Act to the TPO who vide letter dated 17.02.2012 asked the assessee to submit the document maintained in terms of Section 92D of the Act. The TPO passed the order u/s 92CA(3) of the Act on 29.01.2013. Thereafter, the AO passed the draft assessment order dated 12.03.2013 and the assessee raised the objections before the ld. DRP who issued the direction to the TPO/AO vide order dated 26.12.2013 and the TPO on the directions of the ld. DRP passed the order giving effect of the direction of the DRP-1 u/s 24(5) of the Act on 21.01.2014. All the aforesaid orders were passed in the name of erstwhile entity i.e. M/s Genpact Infrastructure (Bhopal) Pvt. Ltd. without any mentioning of the transferee name i.e. M/s Genpact India. Therefore, it is crystal clear from the aforesaid narrated facts that the entity M/s Genpact Infrastructure (Bhopal) Pvt. Ltd. which amalgamated with M/s Genpact India, was not in existence when the TPO/AO/DRP passed their respective orders. 10. On a similar issue, the ITAT Delhi Bench I-1, New Delhi having the same combination passed a detailed order authored by the AM in the case of M/s Maruti Suzuki India Ltd. vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence when it the returns in respect of two assessment years in question. However, before the case could be ted for scrutiny and assessment proceedings could be initiated, M/s Spice got amalgamated with M Corp Pvt. Ltd. It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was dully sanctioned vide orders dated 11th February, 2004. With this amalgamation made effective from 1st July, 2003, M/s Spice ceased to exist. That is the plain and le effect in law. The scheme of amalgamation itself provided for this consequence, inasmuch as simultaneous with the sanctioning of the scheme, M/s Spice was also stood dissolved by specific of this Court. With the dissolution of this company, its name was struck off from the rolls Companies maintained by the Registrar of Companies. A company incorporated under the Indian Companies Act is a juristic person. It takes its birth and gets life with the incorporation. It dies with the dissolution as per the provisions of the Companies Act. It is trite law that on amalgamation, the amalgamating company ceases to exist in the eyes of law. In view of the aforesaid clinching position in law, it is difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (i.e., the amalgamated company). Section 176 which contains provisions pertaining to a discontinuation of business, does not apply to a case of amalgamation. The language of section 159 evidently only applies to natural persons and cannot be extended through a legal fiction, to the dissolution of companies. Once it is found that assessment is framed in the name of non-existing entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of section 292B. Participation by the amalgamated company in assessment proceedings would not cure the defect because "there can be no estoppels against law." 15. In the present case also when the assessment was framed by the AO vide order dated 29.12.2015 in the name of M/s Suzuki Powertrain India Ltd., the said company had already amalgamated with M/s Maruti Suzuki India Ltd. and therefore, it was not inexistence. Moreover, it is clear from the provisions of Section 170(2) of the Act that in the case of amalgamation, the assessment must be made on the successor i.e. the amalgamated company and not on the predecessor i.e. amalgamating company. Therefore, in the present case, the assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, therefore, the assessment framed was void ab initio and the same was rightly quashed by the ld. CIT(A). Since, we have quashed the assessment framed by the AO therefore no separate finding is being given on the other issues raised in the Departmental appeal. 14. Before parting, it is relevant to point out that in the order relied by the ld. Sr. DR i.e. in the case of CIT, Central-1 Vs M/s Shaw Wallace Distilleries Ltd. (supra), the facts were totally different because in the said case, the assessee had not brought to the notice of the department in particular the Assessing Officer, the fact about the amalgamation sanctioned by the Hon'ble High and it had also filed its return of income for the subsequent assessment year. Therefore, the assessee itself had not acted upon the amalgamation but in the present case, the facts are totally different as the assessee brought to the notice of the AO about the amalgamation of the erstwhile Genpact Infrastructure (Bhopal) Pvt. Ltd. which amalgamated with M/s Genpact India w.e.f. 01.04.2010 vide order of the Hon'ble Delhi High Court dated 19.11.2010. Therefore, the case relied by the ld. Sr. DR is of no help to the department." 13. So, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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