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TMI Blog2023 (4) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by Ld.PCIT. Thus factum of changes in the shareholding pattern has been duly disclosed by the assessee in its tax audit report (Form 3CA / 3CD) in the year under consideration - ultimate holding company was Sodexo SA, France. Moreover, when beneficial ownership is with ultimate holding company, loss cannot be disallowed. However, in the instant case, no such loss was claimed by the Assessee. PCIT has proceeded on wrong premise that the Assessing Officer has failed to do and did not conduct any enquiry qua the issue flagged by him - AO has passed the assessment order after enquiry and due verification on the basis of submissions and details furnished by the assessee by taking plausible view - Decided in favour of assessee. - I.T.A No.930/Mum/2022 - - - Dated:- 23-2-2023 - Shri Kuldip Singh (Judicial Member) And Shri Gagan Goyal (Accountant Member) For the Assessee : Shri Sunil Moti Lala For the Department : Shri Satyapal Kumar ORDER PER : KULDIP SINGH : JM Appellant, Sodexo India Services Private Limited [hereinafter referred to as the 'assessee'] by filing the present appeal sought to set aside the impugned order dated 28/03/2018 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble which were considered and accepted by the AO that the said view apart from being correct is nevertheless a possible view. Thus, the order passed u/s 263 of the Act by invoking Explanation 2 thereto to revise the assessment order passed u/s 143(3) of the Act is without jurisdiction, bad in law and liable to be quashed; even more so since the said Explanation has not been invoked in the . notice issued u/s 263 of the Act. 5.] The learned PCIT failed to appreciate that the provisions of Section 79 of the Act were not applicable to the case of the appellant. Further, the learned PCIT failed to appreciate the relevant provisions of the Double Taxation Avoidance Agreement (DTAA) between India and France and particularly Article 26 therein consequent to which the provision of section 79 of the Act were not applicable to the case of the appellant. 6.] The learned PCIT erred on facts and in law in directing the learned Assessing Officer to initiate proceedings for levying penalty under Section 270A of the Act. 7.] On the facts and in the circumstances of the case and in law, the learned PCIT erred in passing impugned order u/s 263 of the Act without providing the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To, SODEXO INDIA SERVICES PRIVATE LIMITED 1ST FLOOR.GEMSTAR COMMERCIAL COMPLEX . RAMCHANDRA LANE EXTENSION,KANCHPADA,MALAD WEST Mumbai MUMBA! 400064 , Maharashtra India PAN/TAN: AAAC4R2547Q A.Y. 2017-18 DIN Notice No : ITBA/REV1/2021- 22/1039076972(1) Dated: 25/01/2022 NOTICE FOR THE HEARING M/s/Mr/Mrs Subject: Notice for Hearing in respect of Revision proceedings u/s 263 of the INCOME TAX ACT, 1961 Assessment Year 2017-18. In this regard, a hearing in the matter is fixed on 01/02/2022 at 12:20 PM. You are requested to attend in person or through an authorized representative to submit your representation, if any alongwith supporting documents / information in support of the issues involved (as mentioned below). If you wis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Assessing Officer u/s. 143(3) on 06.12.12019, as discussed above. 6. Undisputedly, Ld.PCIT, after noticing the shareholding pattern of Sodexo Services Asia Pte Ltd and Sodexo S.A., France to the tune of 75% and 25% respectively invoked the provisions contained under section 79 of the Act and reached the conclusion that there was a substantial change in shareholding pattern when compared to the shares held on 31/03/2016, the assessee company cannot utilize its total brought forward business loss of Rs.12,05,10,296/- which resulted in potential tax effect of Rs.3,61,53,089/- and thereby set aside the assessment order passed by the Assessing Officer under section 143(3) of the Act being erroneous insofar as it is prejudicial to the interest of the Revenue. 7. However, Ld.AR for the assessee challenging the impugned order contended interalia that no set off of brought forward losses has been claimed by the assessee during the year under consideration; that there is no tax impact on the impugned assessment; that enquiries have been carried out by the Assessing Officer during the assessment proceedings and plausible view has been taken that Sodexo S.A., France is the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been duly disclosed by the assessee in its tax audit report (Form 3CA / 3CD) in the year under consideration available at pages 35 to 71 of the paper book. We have perused the tax audit report particularly, page 50 of the paper book wherein pertinent question flagged by Ld.PCIT before the AO has been replied with as under:- 32 b Whether a change in shareholding of the company has taken place in the previous year due to which the losses incurred prior to the previous year cannot be allowed to be carried forward in terms of section 79. No 32 c Whether assessee has incurred any loss referred to in section 73A in respect of any specified business during the previous year No 12. Furthermore, when we have examined the reply filed by the assessee to the notice issued under section 143(1) of the Act at pages 85 to 89, again assessee explained the issue flagged Ld.PCIT before the AO as under:- As per Sr.No.32(b) of Form 3CD, There is no change in share holding of the company has taken place in the previous year due to which the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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