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TMI Blog2021 (12) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... ("hereinafter referred to as the Act"). 2. On the facts and circumstances of the case and in law, the Ld. CIT has erred in holding that the order passed by the Learned Joint Commissioner of Income-tax (hereinafter referred to as 'Ld. AO') u/s. 143(3) read with section 144C of the Act was erroneous and prejudicial to the interests of revenue and, has, thereby erred in revising the same u/s 263 of the Act. 3. On the facts and circumstances of the case and in law, the Appellant submits that the Order passed by the Ld. AO was neither erroneous nor prejudicial to the interest of the revenue and, hence, the revision of the same by the Ld. CIT u/s 263 of the Act is erroneous and bad in law. 4. On the facts and circumstances of the case and in law, the Appellant prays that the impugned order passed by Ld. CIT u/s 263 of the Act, setting aside order passed by the Ld. AO u/s 143 read with section 144C of the Act, is to be struck down and the order u/s 143(3) read with section 144C passed by Ld. AO be restored. Without prejudice above grounds of appeal in Sr. No 1 to 4 above, appellant submits below grounds of appeal. II. Denial of carry forward of business losses pursuant to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT being of the view that the order passed by the A.O was rendered as erroneous insofar it was prejudicial to the interest of the revenue, thus, issued a 'Show cause' notice u/s 263 of the Act, therein calling upon the assessee to explain as to why the order passed by the A.O u/s 143(3) r.w.s 144C(3), dated 02.02.2018 may not be revised on the aforesaid count. In reply, the assessee tried to impress upon the CIT that as its aforesaid claim which was in order had been accepted by the A.O while framing the assessment after necessary deliberations, therefore, the same could not be revised u/s 263 of the Act. However, the CIT not finding favour with the claim of the assessee, therein, inter alia drawing support from the judgment of the Hon'ble High Court of Delhi in the case of Yum Restaurants (India) Pvt. Ltd. [TS 5118-HC-2016 (New Delhi)-O] concluded, that the assessee pursuant to the change in its shareholding was as per Sec. 79 of the Act not entitled to set-off the brought forward accumulated business losses of the earlier years against its income for the year under consideration. Accordingly, the CIT held the order passed by the A.O u/s 143(3) r.w.s 144C(3), dated 02.02.2018 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble High Court of Karnataka in the case of CIT Vs. Amco Power Systems Ltd. (2015) 62 Taxmann.com 350 (Kar). 5. Per contra, the ld. Departmental Representative (for short 'D.R') relied on the order passed by the CIT u/s 263 of the Act. It was submitted by the ld. D.R that as the A.O had not deliberated on the provisions of Sec.79 of the Act, and not conducted any inquiry qua the set-off of the brought forward losses of the previous year against its income for the year under consideration, therefore, the CIT had rightly invoked his revisional jurisdiction and passed the order u/s 263 of the Act. 6. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Admittedly, it is a matter of fact borne from the record that M/s BNT International Corporation i.e the immediate holding company of the assessee which was holding 99.99% of the shares of the assessee company had sold all of the said shares to its fellow subsidiary company, viz. Bechtel Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved as under: "16. The Tribunal, after accepting the submission of the assessee, held that 51% of the voting power was beneficially held with the ABL during the assessment years 2002-03 and 2003-04 also, and would thus be entitled to carry forward and set-off of business losses for the previous years. 17. The fact that ABL is the holding Company of APIL, which is the wholly owned subsidiary of ABL and that Board of Directors of APIL are controlled by ABL, is not disputed. The submission of the learned counsel for the respondent assessee that the shareholding pattern is distinct from voting power of a Company, has force. Section 79 of the Act specifies that "not less than 51% of the voting power were beneficially held by persons who beneficially held shares of the Company carrying not less than 51% of the voting power." Since the ABL was having complete control over the APIL, which is the wholly owned subsidiary of ABL, in our view, even though the shareholding of ABL may have reduced to 6% in the year in question, yet by virtue of being the holding Company, owning 100% shares of APIL, the voting power of ABL cannot be said to have been reduced to less than 51%, because togethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court of Karnataka in the case of Amco Power Systems ltd. (supra), which being a view favourable to the assessee, he was obligated to follow as per the judgment of the Hon'ble jurisdictional High Court in the case of Siemen's India Ltd. & Anr. (supra). Be that as it may, we are of a strong conviction that as the A.O while framing the assessment had taken a possible and a plausible view with respect to the issue under consideration i.e the entitlement of the assessee company to set-off its brought forward losses of the previous years as against its profits for the year under consideration, therefore, on the said count itself the CIT was divested of his jurisdiction to have revised the assessment order u/s 263 of the Act. We, thus, in terms of our aforesaid deliberations are unable to sustain the order passed by the CIT u/s 263 of the Act, dated 25.03.2021 and quash the same; and restore the order passed by the A.O u/s 143(3) r.w.s 144C(3), dated 02.02.2018. The Grounds of appeal Nos. 1 to 7 are allowed in terms of our aforesaid observations. 7. Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations. Order pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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