9911796707
TMI Blog2021 (12) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... rger, which is the result of state reorganization. Hence, we decline to interfere with the reasoned order of the Ld. CIT (A). - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... tax liability then the punishment is disproportionate to the negligence. Therefore, in the interest of justice, we are of the opinion that assessee deserves one more opportunity to plead all the issues on the basis of the audited accounts before the Assessing Officer. We allowed the appeal of assessee set aside the order of revenue authorities below and remit all the issues taken up in the assessment order before the assessing officer for readjudication. We direct the assessee to cooperate with the Assessing Officer and submit the requisite details. We further direct the assessee that it should remain vigilant for getting its accounts audited in the subsequent assessment years." 2.1 Post the set aside by this Tribunal, fresh assessment proceedings were initiated by the AO. The AO again made a disallowance of depreciation of ₹ 29,95,08,702/- and assessed the total income of the assessee at ₹ 38,89,94,500/-. In this regard, vide order dated 28th March 2013, it has been held by the AO as under: "During the year under consideration it is noticed that the opening WDV for the assets for A.Y. 2004-05 do not tally with the closing WDV for A.Y.2003-04. Hence for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was total Fixed Assets as on 31-3-2001 is ₹ 998.92 crores, out of which 682.05 crores was received out of demerger of UPJVNL vide notification letter dated 5-11-2001 correspondingly the depreciation upto that date has also been accounted for in our accounts, as such the depreciation on the written down value as on 9-11- 2001 was considered by UJVNL. Since these Assets represented share capital in the Balance sheet of UPJVNL hence it cannot be said that these assets have been obtained free of cost from UPJVNL. The difference of Assets and Liabilities have been shown as reconstruction reserve under the Capital Reserve in the Balance Sheet. As such this would be a demerger for the purpose Income Tax Act 1961. In case of demerger only a portion of the assets and liabilities of the company are assigned to the demerged company which in this case did not involve any payment of cash and shares for the assets and liabilities transferred from UPJVNL to UJVNL. Hence it may be stated that both the share capital as well as reserves including the reconstruction reserve which belongs to subscriber of the share capital I.e., in this case the State of Uttaranchal had been utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue for the present year as per audited accounts for AY 2004-05. This ground is accordingly allowed with the deletion of addition of ₹ 29,95,08,702. 3.0 Being aggrieved, revenue in appeal before us now. During the course of appellate proceedings, the Ld DR vehemently supported the disallowance made by the the AO. However, when specifically questioned, the Ld DR was unable to rebut the conclusions recorded by the Ld CIT (A) that when the Central Government, vide its order dated 5th November 2001, had transferred all hydro power plants located in the State of Uttaranchal to the assessee, it had recognized the assets in its balance sheet and for the value of assets taken over consideration was paid by the assessee through issuance of share capital. Hence, it cannot be said that these assets have been obtained free of cost by the assessee. 4.0 On the other hand, the Ld AR supported the reasoning given by the Ld CIT (A). 5.0 We have carefully considered the facts of the case and the material available on record. In our considered opinion the conclusions recorded by the Ld. CIT (A) merit to be upheld. The situation arising in the present case is what has been recognized as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this the petitioner company accepted a liability of ₹ 7500 Crores and issued both equity and preference share capital of the face value of ₹ 5000 Crores and ₹ 7,500 Crores, respectively. The balancing figure was reflected as reserves which is an integral part of the shareholders funds. The Government of India has transferred the assets to the petitioner company at their book value i.e., the value at which the said assets are reflected in the books of DTS and DTO and the book value of the Government of India's holding in the petitioner company as shareholder and a creditor aggregates the book value of the assets transferred. The configuration of the capital structure of the petitioner has no impact on the value of the Government's holding in the petitioner company as reserves of a company are subsumed in the book value of its capital. We find no basis, at all, for the Assessing Officer to surmise that reserves represent a subsidy, grant or reimbursement from which the cost of assets of the petitioner company are met and the whole consideration received by the Government of India for transfer of business is limited to the value of loans and the face value ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
