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TMI Blog2023 (9) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... i Laxmi Prasad Sahu, Accountant Member For the Appellant : Shri Siddesh Gaddi, CA For the Respondent : Shri Sunil Kumar Singh, CIT-2(DR)(ITAT), Bengaluru. ORDER PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This appeal is against the final assessment DIN order No.ITBA/AST/S/143(3)/2022-23/1043842417(1) dated 14.7.2022 passed u/s. 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 [the Act] for the assessment year 2018-19 on the following grounds of appeal:- 1. That the order of the learned Assessing Officer (Learned AO), to the extent prejudice to the Assessee, is bad in law and on the facts and circumstances of the case. 2. That on facts and circumstances of the case, the Learned AO has erred in passing the order on a non-existing entity i.e. erstwhile M/s SKF Technologies India Private Limited; 3. Transfer Pricing Adjustment Rs. 3,42,16,173/- (Tax effect Rs. 1,14,22,727/-) a. The learned AO, learned Transfer Pricing Officer ( learned TPO ) and the Honourable Dispute Resolution Panel ( Hon'ble DRP ) have grossly erred in law and facts of the case by proposing a transfer pricing adjustment of INR 3,42,16,173/-under section 92CA of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as unrelated parties. i. Without prejudice to the above, on the facts and in the circumstances of the case and in law, the transfer pricing adjustment, if any, should be restricted to the value of international transactions only. Thus, transfer pricing adjustment if any, should be proportionate to the service income received from the AEs i.e. provision of technical services to the AEs. 4. On the facts and in the circumstances of the case, the learned AO erred in disallowing an amount of INR 3,04,628 treating entrance fees as expenses of personal nature; [tax effect Rs. 1,01,697/-] 5. On the facts and in the circumstances of the case and in law, the learned AO erred in disallowing Rs. 32,50,605 under section 36(1)(va) of the Act on account of contribution to Employee's welfare Fund (PF, ESIC, etc.) though the same has been paid before ethe due date of filing of return of income. [tax effect Rs. 10,85,182 /-] 6. Duty drawback amounting to INR 1,45,81,900/- (Tax effect Rs. 48,68,021/-) a. On the facts and in the circumstances of the case, the learned AO erred in adding duty drawback amounting to INR 1,45,81,900 as per the records of income-tax department wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and informed the TPO about the merger of STIPL with M/s. Lincoln Helios (India) Ltd. and known as SELIPL vide its submissions dated 9.7.2021 19.7.2021. The TPO suggested TP adjustment towards international transactions of Rs. 3,42,16,173 and passed the order dated 31.07.2021 in the name of STIPL. Accordingly the AO passed the draft assessment order dated 30.09.2021, against which the assessee filed the before the DRP in the name of STIPL stating the merger with the Lincoln Helios (India) Limited and name of the new company, SELIPL. The Ld. DRP passed the order on 16.6.2022 in the name of old company, STIPL and accordingly final assessment order dated 14.7.2022 was passed in the name of old company, STIPL. Against this, the assessee is in appeal before the Tribunal. 3. At the outset, the ld. AR argued only on the legal ground No.2. The assessee has filed synopsis on this issue as follows:- 1.1 The draft order has been passed in the name of M/s SKF Technologies India Private Limited bearing PAN number AAACC4393D. The said entity is non-existent pursuant to the merger which has taken effect from 1st April 2018. The Learned AO, while passing the draft order, was aware of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over, as highlighted in the above extract, the mere fact that a return of income has been filed and notice under section 143(2) has been issued in the name of the erstwhile company does not make any difference as the existence of the Assessee has to be checked on the date of passing the draft order. 1.7. Additional reliance is placed on the following rulings of the jurisdictional ITAT : Marlabs Innovations (P.) Ltd. Vs. DCIT /[2022] 196 ITD 179 (Bangalore -Trib.)[13-07-2022]; M/s.Biocon Biologics Limited (Formerly known as Biocon Biologics India Limited) vs. DCIT 1.8. It is further submitted that passing a draft assessment order under section 143(3) r/w section 144C (1) of the Act in the name of a non-existing company renders all the subsequent proceedings null and void. Reliance is placed on FedEx Express Transportation Supply Chain Services (India) (P.) Ltd. v. Dy. CIT [2019] 108 taxmann.com 542 (Mum. - Trib.)/ ITA NO. 857/MUM/2016, wherein it was held that where draft assessment order under section 144C was passed in name of amalgamating company, which was a non-existent entity in eyes of law on the date of passing of such order, it became an illegal order and, thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue authorities on different dates about the merger of STIPL with Lincoln Helios India) Ltd. and known as SELIPL and the ld. TPO, AO ( Draft Final assessment order) DRP passed order in the name of non-existent company STIPL is not sustainable and hence the subsequent orders passed by the TPO/DRP and the final assessment order is void ab initio. 5. On the other hand, the ld. DR relied on the orders of lower authorities and submitted that in Form 35A, the assessee itself has mentioned the name address as SKF Technologies India Private Limited and in the Verification part, Mr. Anurag Bhagania has signed in the capacity of Director of SKF Technologies India Private Limited and the same company was non-existent. He supported the orders of lower authorities and relied on the following decisions:- - B.A. Continuum India (P.) Ltd., 87 taxmann.com 113 (hyderabad - trib.) - Corio India Infotech Services (P.) Ltd. v. DCIT, 92 taxmann.com 445 (bengaluru trib.) 6. After hearing both the sides, perusing the entire material on record and the orders of the lower authorities, we note that SKF Technologies India Private Ltd. [STIPL] merged into M/s. Lincoln Helios (India) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was passed in the name of the Petitioner while at the same time, mentioning the name of the assessee as Laysin BPO Pvt. Ltd. 5. This is clearly untenable in view of the Apex Court judgment in Saraswati Industrial Syndicate Ltd. v. CIT [1990] 53 Taxman 92/186 ITR 278 wherein the following principles were formulated: 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 or 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 existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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