A division bench of the Delhi High Court has dismissed the appeals filed by the income tax department against Moser Baer in the light of the liquidation proceedings pending before the NCLT.
A bench of Justice Manmohan and Justice Dinesh Kumar Sharma has observed that there is no purpose of flogging a dead horse in the light of the current issues facing by the Company.
Coming to the facts of the case, a reference was made to the Transfer Pricing Officer (TPO), as the Assessee had undertaken international transactions with its Associated Enterprises (AEs). A final Assessment Order under Section 143(3) of the Income Tax Act, 1961 was passed by the Assessing Officer. Assessing Officer enhanced book profit by Rs. 4,66,60,747/- towards profit under Section 10A of the Income Tax Act, 1961 by way of exclusion of receipt and expenses of the unit. The assessing officer also made disallowances of indexation benefit of Rs. 94,279/- against long term capital gain of Rs. 1,01,779/- on the sale of shares.
On appeal, the CIT (A) allowed the appeal of the assessee by holding that the proviso to Section 73A of the Act is not applicable to assessee company in respect of indexation benefit of Rs.94,279/- against long term capital gains of Rs.1,01,779/-. However, CIT (A) allowed the appeal of the assessee and deleted the addition by holding that no deduction was claimed under Section 10A of the Act.
Disposing the appeal, the Court has observed that “a perusal of the aforesaid order of Apex Court in Civil Appeal No.4705/2014 makes it clear that the respondent company Moser Baer India Ltd. is not financially viable and is in liquidation before NCLT. The order also makes it clear that even if the Revenue were to succeed, the Official Liquidator would not be in a position to pay the tax amount involved in these appeals. Thus, even if the appellant-department succeeds in the present appeal, there would be no fructifying effect as the respondent company, which is under liquidation, would not be able to discharge its debts and tax liability through the liquidator.”
“The courts are already overburdened. Thus, while dealing with such matters, it has to be seen whether keeping such matters alive would serve any purpose. If such matters continue to remain on board, they would rather block other deserving matters. There is no purpose of flogging a dead horse. We are of the view that there is no purpose in keeping this matter alive. Hence, in view of peculiar facts and circumstances, the report filed by the department and the order passed by the Apex Court in Civil Appeal No.4705/2014, we dispose of the present appeal, leaving the question of law open to be decided in an appropriate case,” the Court added.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
