Setting up off losses under Income Tax Act, 1961 is subject to scrutiny by the Income Tax Department and IBC 2016 lays down that the Resolution Plan should be in compliance with the law laid down – Pradeep M.R Vs. Ravindra Beleyur Resolution Professional of Merchem Limited – NCLAT
NCLAT held that we have gone through the various submissions made by the Appellants and the Respondents. We also understand that the Resolution Plan have been implemented by 18.03.2019 and a lot of time has lapsed in getting final approval and landing into appeals before this Appellate Tribunal. The grey area in this case is that the setting up off losses under Income Tax Act, 1961 is subject to scrutiny by the Income Tax Department and IBC 2016 lays down that the Resolution Plan should be in compliance with the law laid down. Hence, there is a need for getting an affidavit from the Resolution Applicant that he will be successfully completing the Resolution Plan whether he gets this set off under Income Tax Act or not. Secondly the issue is payment of licence fee to the building owner where the CIRP has been carried out and business was running on a “going concern basis” for the period till CIRP was continued or they have handed over the building to the building owner whichever is earlier and the same is to be restricted to his Income Tax Returns so far filed. This costs needs to be included in CIRP costs.
