INCOME TAX ACT, 1961

Sections 263 Section 80-IA(12A)

Revision under section 263 - Erroneous and prejudicial order - Applicability of section 80-IA(12A) -

Pr.CIT treated order passed by AO as erroneous and prejudicial to the interest of revenue on the ground that pursuant to the scheme of arrangement of amalgamation with Dishergarh Power Supply Co. Limited (DPSC Ltd.) of PSU incorporated in 1919, India Power Corporation Limited (IPCL) was amalgamated with the Company with effect from 1-10-2011. Owing to this amalgamation, deduction claimed by assessee under section 80-IA wrongly allowed by AO in terms of section 80-IA (12A) as the company was formed by the consequence of amalgamation. Held: The appointed date is to be reckoned for the purpose of taking into consideration the transfer of assets and liabilities for the purpose of claim of deduction under section 80-IA. From the Certificate of Commissioning of the two eligible Power Undertakings situated at Rajasthan placed on record, admittedly, it was a fact that the two Units were commissioned on 31-3-2012 and 5-1-2013 respectively. Since their commissioning date fells after the appointed date of 1-10-2011, there could not be any occasion of transfer of these two eligible Power Undertakings under the Scheme of Amalgamation. Further, these two eligible Power Undertakings situated at Rajasthan do not form part of the schedule of assets referred in scheduled 'B' to the Approved Scheme of the Amalgamation. It is also a fact noted from Form 10CCB placed on record that claim of deduction under section 80-IA was made for the first time in assessment year 2015-16 in respect of these two eligible Power Undertakings situated at Rajasthan. Considering these facts on record corroborated by the documentary evidences, the appointed date was 1-10-2011 for the purpose of transfer of assets and liabilities under the Approved Scheme of Amalgamation and, therefore, Windmill Undertakings situated at Rajasthan were not transferred from the erstwhile IPCL into assessee under the Scheme of Amalgamation. Accordingly, section 80-IA (12A) did not get attracted in the set of facts and circumstances. Thus very foundation on which proceedings were initiated under section 263 by Pr. CIT fall apart. Therefore, impugned order under section 263 was quashed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

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