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TMI Blog2024 (1) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is no provision under section 35DD to claim 2/5th of the expenditure incurred towards amalgamation / demerger. Accordingly we dismiss Ground no.3 raised by the assessee in this regard. First year of claim of merger expenses - Alternate prayer of the assessee through additional ground is to treat AY 2007-08 as the first year from which the merger expenses are claimed under section 35DD and allow the assessee to claim the expenses in next 4 assessment years subsequent to AY 2007-08 - Though the amalgamation is effective from 01.04,2005, the amalgamation became operative only post the approvals from the Hon'ble High Court which happened during the financial year relevant to AY 2007-08. Therefore we see merit in the contention that AY 2007-08 should be the first of claim u/s 35DD since the said year is when the amalgamation has taken place. A careful reading of language u/s 35DD would support this view for the reason that the section does not mention that claim should begin from the year in which the amalgamation is effective but uses the words from the previous year in which the amalgamation or demerger takes place. In present case, we are of the considered v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not allowing MAT credit as per section 115JAA of the Act. 5. The appellant denies the liability for interest u/s. 234B. Further interest u/s 234B if any can be levied only the returned income. 6. No opportunity has been given before levy of interest u/s. 234B of the I.T. Act. 7. Without prejudice to the appellant's right of seeking waiver before appropriate authority the appellant begs for consequential relief in the levy of interest u/s. 234B of the Act. 8. For the above and other grounds and reasons which may be submitted during the course of hearing of this appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered. 3. The assessee has also raised the following additional grounds of appeal:- ADDITIONAL GROUND OF APPEAL # 9 Without prejudice to Ground No. 3, if Ground No. 3 is decided against the appellant, then the appellant may please be allowed 1/5th of the merger expenses in AY 2011-12 (if AY 2007-08 is considered as first year for the purpose of sec 35DD) and the Learned AO may be directed to allow the same in AY 2011-12. 4. The assessee is a public limited company. For the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal ground as a without prejudice plea to ground No.3 for the reason that if ground 3 is not allowed, the assessee should be allowed to treat AY 2007-08 as the first year of claim of the merger expenses. The Ld.AR submitted that the additional ground is purely legal and does not warrant verification of any new facts and, therefore, the same may be admitted for adjudication. 7. The Ld.DR, on the other hand, vehemently argued that the assessee has not raised this alternate plea for claiming 1/5th for 5 years beginning A.Y. 2007-08 before lower authorities and it has been claimed for the first time before the Tribunal. The Ld.DR, therefore, argued that the additional ground cannot be admitted. 8. We heard the parties with regard to the admission of additional grounds. The alternate plea raised by the assessee through the additional ground raised is pure legal issue, which does not require investigation of new facts. Hence, placing reliance on the judgment of the Hon ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC), we admit the additional grounds.. 9. The Ld.AR submitted that the orders of the High Courts were received during the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure, on or after the 1st day of April, 1999, wholly and exclusively for the purposes of amalgamation or demerger of an undertaking, the assessee shall be allowed a deduction of an amount equal to one-fifth of such expenditure for each of the five successive previous years beginning with the previous year in which the amalgamation or demerger takes place. (2) No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1) under any other provision of this Act. (emphasis supplied) Section 35DD is unambiguous wherein it is provided that the expenses incurred wholly and exclusively for the purpose of amalgamation is to be allowed as a deduction in 5 equal installments beginning from the year in which the amalgamation or demerger takes place. Therefore the claim of 2/5th of the merger expenses by the assessee during the year under consideration cannot be allowed for the reason that there is no provision under section 35DD to claim 2/5th of the expenditure incurred towards amalgamation / demerger. Accordingly we dismiss Ground no.3 raised by the assessee in this regard. 13. The alternate prayer of the assessee through additional ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that AY 2007-08 be treated as the first year of claim of merger expenses for the purpose of section 35DD of the Act. Accordingly the additional ground is allowed in favour of the assessee. 14. Ground no.4 pertains to lower authorities not allowing the MAT credit as per section 115JAA. For AY 2006-07 the assessee has paid tax under section 115JB of the Act and accordingly claimed the credit for MAT during the year under consideration. The credit was denied for the reason that for AY 2006-07 the assessed income as per the normal provisions of the Act was more than the income as per section 115JB of the Act and therefore the assessing officer held that there was no MAT credit available to be setoff during the year under consideration. 15. The ld AR in this regard submitted that the assessee has opted for Vivad se Vishwas Scheme (VSVS) for AY 2006-07 and as per the Scheme, the assessees are given option to - (i) include the amount by which MAT credit to be carried forward is reduced in disputed tax and carry forward the MAT credit by ignoring such amount of reduction or alternatively (ii) carry forward the reduced MAT credit. The ld AR further submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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