TaxTMI 
TaxTMI 
2009 (12) TMI 732
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....d been assessed as business income ignoring the fact that in the immediately preceding year similar income was assessed as income from other sources and that all assessment years are separate? 3. Whether in the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in allowing miscellaneous expenditure of Rs. 5,71,091 ignoring the fact that this expenditure was claimed against income which was rightly assessable as exempt income, income from house property and income from other sources ? 4. Whether in the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in allowing expenditure of Rs. 5,74,091 ignoring the fact that no supporting bills/ vouchers were produced by the assessee in respect of such expenses ? 5. Whether in the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in directing the Assessing Officer to take the income from IFCI Bonds at Rs. 11,02,439 in place of Rs. 72,76,930 without considering the fact that the assessee failed to produce any documentary evidence in support of his claim of being an intermediate purchaser ? 6. In the fa....
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....me-tax (Appeals) that total income credited to the account of the assessee is a sum of Rs. 15,57,123 which is in the shape of interest earned by the assessee on various accounts. The details of which are as under : Income Rs. Interest on loans 2,16,707 Bank interest 974 Interest on bonds 7,795 Interest on debentures 5,000 Dividend from shares 12,530 Interest from post office 53,040 Interest on income-tax refund 43,489 Interest on wealth-tax refund 2,374 Interest on redemption of bonds 1,10,243 15,57,123 Against the above expenditure of Rs. 5,74,091 is claimed by the assessee: Less : Expenditure claimed : Salary to staff 4,44,800 Postage and telegrams 1,188 Printing and stationery 607 Telephone 35,431 Uniform and welfare 1,066 Bank charges 5,325 Bonus 14,400 Insurance 10,220 Car expenses 24,857 Vehicle running expenses 7,180 Foreign trip expenses 21,100 General expenses 7,010 Legal expenses 14,500 ....
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....f the Departmental appeal are dismissed. Ground No. 5 of the Departmental appeal relates to interest earned by the assessee from IFCI Bonds. It is the case of the Assessing Officer that the difference between the initial value and sale proceeds of the bonds was assessable as income of the assessee. As against that it is the case of the assessee that he being intermediate purchaser of the bonds that it could not be so assessed and the cost incurred by the assessee on purchase of these IFCI Bonds has to be allowed from the sale proceeds. A table has been given in paragraph 6.2 whereby it has been shown that such and such quantity of IFCI Bonds was purchased on such and such a date and such and such a rate. The said table for the sake of convenience is reproduced below : Date No. of bonds Rate Amount 21.12.1998 4 7,053.93 28,215.70 23.12.1998 1 7,027.75 7,027.75 01.01.1999 4 7,113.45 28,453.80 28.10.2003 32 14,506.26 464,200.45 29.10.2003 93 14,506.26 1,349,082.56 134 1,876,980.26 IFCI Bonds (Rs. 10,000 paid) 19.01.1999 40 15,156.37 6,06,254.90 28.10.2003 116 28....
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....aken as expended by the assessee to acquire that capital asset. The Assessing Officer has observed in the assessment order that the assessee had purchased the shares of an unknown/unquoted/closely held family company on a premium of Rs. 40 and Rs. 240 per share whose face value is Rs. 10 only and those shares were sold at face value. The Assessing Officer observed that paid-up share capital of the said company was Rs. 62,40,000, reserve fund was Rs. 1 lakh and share premium account was of Rs. 1,48,91,000. Surplus in the profit and loss account was a sum of Rs. 2,91,890 and in this manner the learned Assessing Officer has arrived at book value of the share of Rs.34.49 per share. In the circumstances the learned Commissioner of Income-tax (Appeals) after referring to the decision of the hon'ble Madras High Court in the case of CIT v. S. Balasubramaniam [1986] 159 ITR 288 has observed that rules prescribed under the Wealth-tax Rules or Schedule to the Act may provide a good guideline for finding the value of unquoted shares. The assessee has not been able to justify the extremely low sale value of the shares as declared by him. In view of this, the addition of this ground is confirmed....