Partial Relief to Dell: ITAT directs AO to assign reason for not allowing set off brought forward Business Loss [Read Order]

In a partial relief to Dell International Services India, the Bangalore Bench of Income Tax Appellate Tribunal (ITAT) while restoring the issue directed the Assessing Officer (AO) to assign reasons for not allowing a set-off of brought forward business loss.

The assessee, M/s. Dell International Services India Pvt. Ltd. is engaged in the business of providing software development services and IT-enabled services to its Associated Enterprises (AE). This assessee is an amalgamating entity and has got a history. Initially, two companies named M/s. Dell International Services India Pvt. Ltd. and Perot Systems Business Process Solutions Pvt. Ltd. got amalgamated with M/s. Perot Systems TSI (India) Pvt. Ltd., vide order passed by High Court of Karnataka under section 391 to 394 of the Companies Act. The amalgamating company M/s. Perot Systems TSI (India) Pvt. Ltd is the assessee herein, whose name now stands changed to M/s. Dell International Services Pvt. Ltd.

The assessee has raised grounds with regard to the issue in respect of the denial of set-off of brought forward business loss of Rs.16.60 crores claimed in the return.

The Coram of Judicial Member George George K. and Accountant Member B.R. Baskaran noted that the AO has not assigned any reason for not allowing a set-off brought forward business loss.

The Tribunal restored the issue of set-off brought forward the business loss to the file of the AO for examining the claim of the assessee in accordance with the law.

“We heard the parties on this issue and perused the record. It appears that the AO has given credit for the amounts wherein the PAN number of the present assessee is shown. It is the case of the assessee that the payments made under the name and PAN number of merged entities also should be given credit when the corresponding income is assessed in the hands of the present assessee. We find merit in the said contentions. However, this issue requires factual verification. Accordingly, we restore this issue to the file of the AO for examining the claim of the assessee in accordance with the law,” the ITAT while addressing the issue in respect of non-granting of proper credit for TDS and advance tax, said.

To Read the full text of the Order CLICK HERE

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