9911796707
TMI Blog1999 (5) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... -90 the assessee filed a return of income on 28-12-1989 declaring a profit of Rs. 32,27,960 for 21 months from 1-7-1987 to 31-3-1989. Thereafter, the assessee filed a revised return declaring total income at Rs. 1,44,350 on 6-7-1990 for a period of six months from 1-7-1987 to 31-12-1987. The revised return was filed because the assessee company got amalgamated with M/s. Farmson Pharmaceuticals (Gujarat) Pvt. Ltd. w.e.f. 1-1-1988 as per the order of Gujarat High Court dated 23-4-1990. 4. In the assessment order under section 143(3) dated 16-10-1991, the Assessing Officer computed the total income of the assessee at Rs. 2,07,660 after making certain adjustments to the returned income. In the second part of the assessment order, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat) (P.) Ltd. As per the scheme of amalgamation, the respondent-company got dissolved on the said date of amalgamation and ceased to have existence. The assessee-company, therefore, contended before the Assessing Officer that as per the amended provisions of section 3 of the Income-tax Act, 1961, the previous year of the Company for Assessment year 1989-90 has to be taken into consideration from 1st July, 1987 to 31st March, 1989 (i.e. a period of 21 months) for the computation of profit under section 115J and the P L account of the company for the relevant previous year has to be considered. The relevant previous year as per the amended definition would be the period from 1st July, 1987 to 31st March, 1989. Since the company was diss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the CIT(A). 8. We have considered the rival submissions and the evidence on record. The question to be considered is whether the respondent assessee-company M/s. Farmson Analgesic (P.) Ltd. is liable to tax under the provisions of Section 115J for Assessment year 1989-90. According to the assessee-company, the company was not in existence from 1-1-1988 because on this date the company got amalgamated with Farmson Pharmaceuticals (Guj.) (P.) Ltd. For Assessment year 1989-90, the previous year has ended on 30-3-1989 as per the amended provisions of Section 3 and since the company was not in existence as on 31-3-1989, the preparation of P L account as on 31-3-1989 is an impossibility. Consequently, the company cannot be made l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the subsequent period till the date of amalgamation remained to be considered. This period is a period of six months from 1-7-1987 to 31-12-1987. It is well-settled in law that the company is a distinct legal entity and under the Income-tax Act also it is a distinct assessable entity. The assessee's arguments with respect to the period after amalgamation can be accepted as valid proposition of the law because the company which got dissolved on 1-1-1988 and got amalgamated with another company does not have any independent existence from 1-1-1988 onwards. The Assessing Officer has rightly considered the assessment of the company Farmson Pharmaceuticals (Guj.) (P.) Ltd. for the previous year ended on 31-3-1989 as it was the company whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15J, he held that the provisions of Section 115J were applicable to the assessee-company's case. We do not find any impropriety in the action of the Assessing Officer and we are not persuaded to agree with the reasoning of the CIT(A) that since the company ceased to exist w.e.f. 1-1-1988 the provisions of Section 115J were not applicable as these provisions came into effect from 1-4-1988. We are forced to remark that the CIT(A) has misconstrued the provisions of Section 115J in this connection. The relevant provisions of Section 115J(1) read as under: "Section 115J(1) : Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
