COMMISSIONER OF INCOME TAX Vs. INDUS FILA LTD.

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2008-09. The appeal was admitted by a bench of this Court vide order dated 19.02.2013 on the following substantial question of law:

(2.) Facts leading to filing of the appeal briefly stated are that assessee is in the business of manufacturing ready made garments. The assessee filed the return of income on 31.03.2009 for Assessment Year 2008-09 declaring income as 'NIL' after setting off, of loss of Rs.31,36,33,145/- in respect of M/s Tulip Apparels Private Limited, the amalgamating company. The Assessing Officer by an order dated 21.12.2010 inter alia did not accept the contention of the assessee that effective date of amalgamation was 31.03.2008. It was further held that amalgamating company got merged with the assessee only after 06.02.2010 i.e., the date on which the scheme of amalgamation was approved. The Assessing Officer therefore, disallowed the claim of set off of loss of M/s Tulip Apparel Private Limited under Section 72(A) of the Act. The assessee filed an appeal before the Commissioner of Income Tax (Appeals), who by an order dated 21.12.2010 inter alia held that effective date of amalgamation is 31.03.2008 and the addition made by the Assessing Officer was deleted. The appeal preferred by the assessee was allowed.

(3.) The revenue thereupon filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The Tribunal by an order dated 31.07.2012 inter alia held that amalgamation takes effect from the appointed day as mentioned in the scheme of amalgamation. It was further held that finding of the Assessing Officer that scheme of amalgamation is a device to avoid taxes is without any basis and is in the realm of surmises and conjectures. It was held that the amalgamation is deemed to have been effected on 31.03.2008 and therefore, the claim of the assessee for set off is required to be allowed. Accordingly, the appeal preferred by the revenue was dismissed. In the aforesaid factual background, the revenue has preferred this appeal.