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TMI Blog2020 (11) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... AIYA , ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE , JUDICIAL MEMBER Appellant by : Sh. Vishal Kalra , Adv Ms. Reema Malik , Adv Respondent by : Sh. M. Barnwal , Sr. DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 28/12/2011 passed by CIT(A)- 37, New Delhi for Assessment Year 2008-09. 2. The grounds of appeal are as under:- GROUNDS OF APPEAL 1. That on the facts and the circumstances of the case and in law, the order passed by the Hon'ble Commissioner of Income Tax (Appeals) ('CIT(A)')/Ld. AO is bad in law. 2. That on the facts and circumstances of the case and in law, while acknowledging that the assessment proceedings undertaken by the Ld. AO were not in accordance with the scheme of Section 144C of the Act and considering that the assessment order giving effect to DRP directions was not passed within the permitted time period, the Hon'ble CIT(A) erred in not explicitly quashing the impugned assessment proceedings, being void ab initio. 3. The Ld. AO erred on facts and in law in enhancing the income of the Appellant by INR 83,857,011 holding that the international tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 31, 2008); and rejecting, in particular, the following filters applied by the Appellant in its fresh search: vi. companies having other operating income (i.e. income other than manufacturing and trading income) to sales greater than 50% were accepted; vii. companies having research development costs to sales less than 3% were accepted; viii. companies with net worth less than zero were rejected; ix. companies having advertising, marketing and distribution costs to sales less than 3% were accepted. 3.1. including high-profit making companies in the final comparables set for benchmarking a company that is in its initial year of business operations and is still in the set-up and a nascent stage such as the Appellant (disregarding judicial pronouncements on the issue), thus demonstrating an intention to arrive at a pre-formulated opinion without complete and adequate application of mind with the single-minded intention of making an addition to the returned income of the Appellant; 3.2. including certain companies having significantly higher turnover vis-a-vis the Assessee; 3.3. including certain companies that are not comparable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judice to other contentions of the Appellant, not appreciating that as per the judicial precedence, the imputation of interest has to be seen on amount outstanding for more than six month as on date of balance sheet; f. without prejudice to other contentions of the Appellant, not appreciating that if at all interest is to be imputed, instead of an ad-hoc rate of 17.26%, the LIBOR rate for the FY 2007-08 should be applied for imputing interest since receivables outstanding were in foreign currency; g. without prejudice to other contentions of the Appellant, not appreciating that a noninvestment or non-finance company such as the Appellant would not invest its recovered earnings in risky loan deals, rather park the funds in short term risk free liquid schemes such as fixed deposits until redeployment of funds into the business, thereby earning an income on the outstanding receivables at a rate applicable to short term deposits and not the rate applicable to loans. 5. The Ld. AO have grossly erred by disregarding judicial pronouncements in India in undertaking the TP adjustment. 6. The Ld. AO has grossly erred on facts and in law by levying interest under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructure (Hyderabad) Pvt. Ltd., erstwhile company amalgamated with Genpact India w.e.f. April 1, 2010, vide order dated November, 19, 2010 passed by the Hon ble Delhi High Court. The Ld. AR submitted that the Assessing Officer was informed about the scheme of amalgamation vide letter dated 24/1/2011 addressed to ACIT, Circle 1, Jaipur as well as to Addl. CIT, Range 12, New Delhi and also to ACIT, Circle 12(1), New Delhi. The Ld. AR relied upon the following decisions of the various High Court and the Apex Court as well as the Tribunal: i) Maruti Suzuki India Ltd. vs. DCIT ITA No. 902/Del/2017 dated 06.04.2017 ii) PCIT vs. Maruti Suzuki India Limited (2019) 416 ITR 613 (SC) iii) Genpact Infrastructure (Bhopal) Pvt. Ltd. (Now merged with Genpact India) v. DCIT (ITA No. 199/Del/2015 dated 27.04.2018 Tri. iv) Genpact Infrastructure (Kolkata) Pvt. Ltd. (Now merged with Genpact India) v. DCIT (ITA No. 198/Del/2015 dated 27.04.2018 Tri. v) PCIT v. Genpact India (previously known as Genpact Infrastructure (Bhopal) Private Limited)(ITA 168/2019, CM Appl. 40543/2019 order dated 17.09.2019) Delhi High Court vi) PCIT v. Genpact India (previously known as Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter was also mentioned in the decisions of the Hon ble Delhi High Court in cases of other entities of Genpact India. The reliance upon the decision of the Hon ble Supreme Court in case of Maruti Suzuki India Ltd. (Supra) by the Ld. AR is apt in the present case. The Hon ble Supreme Court observed in para 19 as follows: 19. (iii) Thirdly, the consequence of the scheme of amalgamation approved under Section 394 of the Companies Act 1956 is that the amalgamating company ceased to exist. In Saraswati Industrial Syndicate Ltd., the principle has been formulated by this Court in the following observations: 5. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or amalgamation has no precise legal meaning. The amalgamation is a blending of two or more 30 [2019] 260 Taxman 412 (Del.) 31 (2019) 261 Taxman 137 (Guj) existing undertakings into one undertaking, the shareholders of each blending company become substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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