DCIT Vs RVR Enterprises (ITAT Hyderabad)
ITAT Hyderabad held that once the resolution plan is approved by the NCLT and the Company has been sold on going concern basis, whatever claims made before the Liquidator is final and all past or existing liabilities shall extinguish. Accordingly, matter restored back to re-examine claim made before liquidator.
Facts- The assessment of the assessee was completed u/sec.143(3) of the Act on 31.12.2019 and determined the total income of the appellant company at Rs.11,76,72,980/- by making addition towards disallowance of retention money written off; addition towards bank guarantee invocation, addition towards inter-corporate loan and addition towards other payables.
CIT(A) partly allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that when a resolution plan is approved by NCLT, the claims, which are not part of the resolution plan, shall stand extinguish and the proceedings related thereto, shall stand terminated. In otherwords, once the resolution plan is approved by the NCLT and the Company has been sold on going concern basis, whatever claims made before the Liquidator is final and all past or existing liabilities shall extinguish. In the present case, since the liability pertain to assessment year 2012-2013 which is prior to the date of sale of the appellant company to the new management in terms of sale certificate dated 06.04.2023 issued by the Official Liquidator, in our considered view, all liabilities including liability relates to Income Tax shall extinguish and the Department does not have any claim. Since there is no clarity as to the claim made by the Department before the Liquidator of their outstanding liability, in our considered view, the matter needs to be set-aside to the file of Assessing Officer to re-examine the claim in light of the order of the Hon’ble Supreme Court in the case of Ghanshyam Mishra & Sons Pvt. Ltd., vs., Edelweiss Asset Reconstruction Company Ltd., & Ors.
