Brief of the case:
In the case of M/s PVP Ventures Ltd. Vs. DCIT Chennai Bench of ITAT have held that assessment could not be made in the hands of non-existing company. ITAT observed that the company, assessed at Hyderabad, has amalgamated into assessee. In the case of Predecessor Company Hyderabad bench of ITAT have held that after amalgamation assessment can be made at Chennai where the successor company was assessed.
After going through the provisions of section 170 ITAT held that the provisions of Section 170(2) will override the provisions of Section 170(1) of the Act. Therefore, the assessment has to be made only in the hands of the present assessee in view of the provisions of Section 170(2) of the Act. Hon’ble ITAT has also adjudicated other issues relating to administrative and other expenses, short term capital gain etc.
Facts of the case:
- Assessee-company is engaged in the business of infrastructure development.
- Assessee had claimed Rs. 3,70,36,474/- under the head “Administrative and Other expenses”. Assessee made investment in the capital asset. The assessee claims the same under the head “Administrative and Other expenses”.
- The tax deducted at source receivable amounting to Rs. 1,76,13,603/- was also part of the sales already offered in the earlier year.
- Assessee write off the amount u/s 36(1)(vii) read with Section 36(2) of the Income-tax Act, 1961.
- The work-in-progress to the extent of Rs. 1,94,12,871/- was also written off in the books of account.
- Assessee purchased a property in the AY 2008-09 and sold the same in the very same assessment year.
- The assessee offered the profit on sale of the land under the head “short term capital gains” in the return of income.
- Since the property was purchased and sold in the very same assessment year, it was not reflected in the fixed asset schedule and in depreciation statement.
- Further AO made addition of Rs. 31,07,20,000/- u/s 69A.
- In the course of assessment proceedings, the Assessing Officer found that the assessee has received a sum of Rs.377,71,78,316/- from M/s Platex Limited incorporated in Mauritius.
- The assessee claimed before the Assessing Officer that the Mauritius company M/s Platex Limited invested the above sum of Rs. 377,71,78,316/- by way of foreign direct investment for subscription towards convertible debentures.
- The assessee was asked to produce the creditworthiness of M/s Platex Limited and genuineness of transaction. The assessee-company has produced only provisional accounts of M/s Platex Ltd., for the financial year 2007-08.
- M/s PVP Ventures Pvt. Ltd. was a private limited company assessed in Hyderabad. Deutsche Bank, Singapore, sanctioned Rs. 508.72 Crores to M/s Platex Ltd., Mauritius. M/s Platex Ltd., Mauritius, in turn, invested the entire amount of Rs. 508.72 Crores in M/s PVP Ventures Pvt. Ltd. in Hyderabad.
- The assessee-company was earlier known as SSI Limited. M/s PVP Ventures Pvt. Ltd. merged with SSI Ltd. by order of amalgamation approved by Madras High Court.
- The SSI Ltd. subsequently changed its name as M/s PVP Ventures Ltd., the present assessee.
- AO Further observed that assessment has also made with regard to interest income of Platex Ltd., Mauritius in the hands of the present assessee and also made protective assessment in the hands of M/s Platex Ltd., Mauritius.
Contention of the assessee:
