TaxTMI 
TaxTMI 
2012 (5) TMI 257
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....the Tribunal was right in law in deleting the addition of Rs. 70,60,209/- made by the Assessing Officer on account of outstanding brokerage payable by the Assessee Company of earlier years by holding that neither there was any remission nor cessation of the said liability during the assessment year under appeal even though the Assessee Company had failed to establish before the Assessing Officer and the CIT (Appeals) that the said liability existed in Assessment Year 2002-03 being the year under appeal; B. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that there was absolutely no basis whatsoever about the Assessing Officer coming to the conclusion that the redemption of preference shares was....
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....Officer sought confirmation of these liabilities. The assessee pointed out that during the course of the Assessment Year 2004-05 an amount of Rs. 62.87 lakhs was written back into the profit and loss account. The amount was offered as income for Assessment Year 2004-05 and taxes were paid thereon. The Assessing Officer came to the conclusion that the liability did not exist for Assessment Year 2002-03 and brought the amount to tax for that year. The CIT(A) agreed with the Assessing Officer. The Tribunal has noted that the only ground on which the addition was made was that the liability never existed in Assessment Year 2002-03. The Tribunal has on the other hand come to the conclusion that there was an error on the part of the Assessing Off....
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.... the assessee. The Tribunal has affirmed the view of the CIT(A) holding that the genuineness and credibility of the capital transaction was not disputed for the previous ten years. Both the Companies were juridical entities; the fact that the Companies were under common management would not indicate that the transfer was sham and that the view of the Appellate Authority was purely based on surmises and conjectures. The Tribunal has followed the judgment of the Supreme Court in Anarkali Sarabhai v. CIT [1997] 224 ITR 422 in holding that the redemption of preference shares results in a transfer within the meaning of Section 2(47). Finally, the Tribunal has held that the non-cumulative redeemable preference shares cannot be equated with debent....
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....n the ambit of Section 2(47) of the Income Tax Act, 1961, since it amounts to a transfer. Question (C) will, therefore, not give rise to any substantial question of law. 7. As regards question (D), Section 48 provides that the income chargeable under the head "capital gain" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of a capital asset: (i) The expenditure incurred wholly and exclusively in connection with such transfer; and (ii) The cost of acquisition of the asset and the cost of any improvements thereto. The second proviso to Section 48 provides for indexation where long term capital gain arises from the transfer of a long term capital asset. The third provis....
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....shares, whether formed before or after the commencement of the Act that part of the share capital which fulfills the following requirements, namely: "(a) that as respects dividends, it carries or will carry a preferential right to be paid a fixed amount or an amount calculated at a fixed rate, which may be either free of or subject to income-tax; and (b) that as respects capital, it carries or will carry, on a winding up or repayment of capital, a preferential right to be repaid the amount of the capital paid up or deemed to have been paid up, whether or not there is a preferential right to the payment of either or both of the following amounts, namely:- (i) any money remaining unpaid, in respect of the amo....
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....erformed, or is not performed, as the case may be" P. Ramanatha Aiyar's Advanced Law Lexicon 3rd Edition 2005 page 565 Debt securities typically are regarded as consisting of notes, debentures and bonds. Technically, a 'debenture' is an unsecured corporate obligation while a 'bond' is secured by a lien or mortgage on corporate property. However, in commercial parlance, the expression "bond" is often used indiscriminately to cover both bonds and debentures. As a matter of fact, the Companies' Act, 1956 in Section 2(12) defines 'debenture' to include debenture stock bonds and any other securities of a company, whether or not they constitute a charge on the assets of the Company. A bond is a formal document constituting the acknowledgement of ....