No Addition since Assessment was framed by the AO on Non-Existent Amalgamated Company, not on the Amalgamating Company: ITAT [Read Order]

ITAT CBDT

In the case of Genpact Infrastructure (Bhopal) Pvt. Ltd, Delhi bench of Income Tax Appellate Tribunal ( ITAT ) recently held that addition cannot be made since the assessment framed by the Assessing Officer (AO) on the non-existent amalgamated company and not on the amalgamating company.

Assessee in the instant case engaged in the business of providing Information Technology enabled Services (“ITeS”) / Business Process Outsourcing (“BPO”) services, including finance and accounting, collections, insurance, customer fulfillment services etc. to its associated enterprise.

During the Financial year 2010 erstwhile Genpact Infrastructure Pvt.Ltd amalgamated with Genpact India and it was informed to the AO about the scheme of amalgamation. However, the AO passed assessment order in the name of erstwhile Genpact Infrastructure Pvt.Ltd instead of the amalgamated company Genpact India.

The counsel for the Assessee Vishal Kalra and advocate Reena Malik submitted that the assessment order has been passed on erstwhile entity i.e. M/s Genpact Infrastructure Pvt. Ltd. which amalgamated with M/s Genpact India, thus, the order passed by the AO was bad in law and void ab initio as the same had been passed on a non-existent entity.

After analyzing the available material facts on records, the Tribunal bench consists of Judicial Member K.N.Chary and Accountant Member N.K.Saini observed that “it is an admitted fact that the Assessee Company erstwhile Genpact Infrastructure Pvt.Ltd amalgamated with Genpact India and the same was informed by the Assessee to the authorities. But the AO has framed the assessment on the non-existent amalgamated company, not on the amalgamating company without considering the amalgamation scheme. Therefor the assessment framed was void ab initio”. Consequently the bench directed the authority to quash the assessment order passed by them.

While allowing the appeal filed by the Assessee the division bench declared that addition cannot be made since the AO framed the assessment on the non-existent amalgamated company instead of the amalgamating company.

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