Case Law Details
DCIT Vs Cummins Sales & Services (I) Ltd (ITAT Pune)
Held that benefit of carried forward business losses and unabsorbed dep. u/s. 72A available only if the amalgamation/demerger is genuine
Facts-
The respondent-assessee is engaged in the business of sale and services of diesel engines, its spare parts and related equipment. ROI was filed on 23.11.2006 declaring a total income of Rs.55,44,54,789/- which was revised on 28.10.2007 at a total income of Rs.29,84,61,310/-. Against it, the assessment order was passed u/s 143(3) at the total income of Rs.49,78,29,562/- after disallowing set-off of brought forward business losses of Rs.16,54,99,878/- and unabsorbed depreciation losses of Rs.3,47,20,047/- about a demerged undertaking under sub-section (4) of section 72A of the Act. AO also made the addition of Rs.6,60,520/- u/s 14A with which we are concerned.
During previous year, an undertaking, namely the Highway Solutions of Cummins Auto Services Ltd. (CASL) a 100% subsidiary of the respondent-assessee company was demerged and vested with the respondent-assessee company w.e.f. 01.04.2005. The respondent-assessee claimed the set-off of brought forward business losses and unabsorbed depreciation losses relating to demerged undertaking against the taxable income as provided under sub-section (4) of section 72A of the Act.
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