TaxTMI 
TaxTMI 
2014 (11) TMI 439
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....CIT(A) erred in deleting he disallowance of Rs. 88,00,992 u/s 14A r/w rule 8D? 3. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the disallowance of expenditure of software charges amounting to Rs. 3,74,37,137? 2. At the outset, the learned counsel for the assessee submitted that the issues involved in this appeal are squarely covered by the decision of the Tribunal in assessee's own case for the assessment year 2001-02 and 2004-05, passed in ITA no.270/Mum./2005, ITA no.4982/Mum./2011 and ITA no.4280/Mum./2011, order dated 9th May 2014. 3. Facts in brief:- The assessee is engaged in the business of manufacturing and trading of dyes and intermediates, specialty, chemicals, textiles, plastic, etc. Regarding disallowance on account of interest and fee paid to the club, the Assessing Officer noted that in the tax audit report, the assessee had shown payment of Rs. 33,30,000, as entrance fees for membership of Cricket Club of India, which was claimed as revenue expenditure. In response to the show cause notice, the assessee submitted that the said payment has been made in the normal course....
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....wance has to be made. Thus, he directed the Assessing Officer to work out the disallowance on account of direct and indirect expenditure on account of exempt income and worked out some reasonable basis in accordance with the ratio laid down in Godrej & Boyce Mfg. Co. Ltd. (supra). 9. Before us, both the parties admitted that this issue was set aside by the Tribunal to the file of the Assessing Officer for fresh adjudication. However, the learned counsel submitted that firstly in the assessment years 2000-01 and 2002-03, the disallowance was restricted to 2% of the dividend income as reasonable basis, therefore, the same should be adopted as a consistent and reasonable basis for this year also being consistent with the earlier year. 10. After considering the rival submissions, we find that the Tribunal has set aside this issue to the file of the Assessing Officer for fresh adjudication. In this year, the learned Commissioner (Appeals) has already given direction to the Assessing Officer to work out the disallowance on some reasonable basis. Thus, we do not wish to interfere in such a finding of the learned Commissioner (Appeals) and the plea of disallowance being restricted to 2% ....
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....all information whether from notes or from Internet and offers very useful tools like e-mail, Calender, To-do lists etc. All Clariant Group companies are inter connected with "Lotus Note" and connectivity is effected, administered. The AO rejected the claim of the assessee of the expenditure being in the nature of Revenue and held that as it had provided enduring benefit and the expenditure being on account of capital, the assessee was entitled to claim depreciation only. He provided depreciation @ 25% and the balance amount of Rs. 17,48,195/- was added to the income of the assessee. The Ld. CIT(A) has sustained the action of A.O. The assessee is aggrieved, hence, has filed aforementioned grounds. 13.1 It was submitted by Ld. AR that similar expenses in respect of A.Y 2002-03 and 2003-04 were held to be allowable as revenue expenditure by Ld. CIT(A). He further submitted that the expenditure is in the nature of user of software which by no stretch of imagination can be said to be of expenditure in the nature of capital. It did not provide any enduring benefit to the assessee and was a powerful tool to carry out the work of the assessee ef....
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....ellant company to set off of Rs. 30,00,000 of the brought forward loss of the amalgamating company against the long term capital gain. He ought not to have done so. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of the payments made to ex-managing directors of Rs. 1,97,12,000 on the ground that the allowability of the said expenditure was unexplained by the appellant company. He ought not to have done so." 18. Brief facts, qua the issue involved, as stated in the assessment order as well as in the impugned order are that, as per the scheme of merger, following companies namely, Clariant India Ltd., Vananil Dyes and Chemicals Ltd., BPT Pvt. Ltd. and Kundalika Investment Ltd., got merged into Colourchem Ltd. Thereafter, the amalgamated company was renamed as Clariant Chemicals India Ltd. with effect from 1st April 2005. In the tax audit report, it was shown that long term capital loss of Rs. 60,19,436, and Rs. 3,15,541 for the assessment years 2005-06 and 2004-05 of the erstwhile amalgamating company was claimed to be brought forward and set-off against the long term capital gain of the ama....
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.... be allowed to be carried forward. Accordingly, I consider it proper and appropriate to hold that the A.O. was justified in rejecting the claim of the appellant. Thus, this ground of appeal is dismissed." 21. Before us, the learned Counsel, Shri Farooq Irani, for the assessee submitted that, section 74 per-se does not bar the set-off and carried forward of losses under the head capital gains of the amalgamating company to the amalgamated company. There is no specific clause in section 74 that there should be the same assessee for claiming set off of carried forward loss under the head "capital gain". The section provides that, if there is a loss to the assessee then the whole loss subject to the other provisions shall be carried forward. On the other hand, in section 72, there is a specific mention of identity of the assessee as there the phrase used is "he" for the assessee, which means that it is for the same assessee. In section 74, there is no such specific identification of the assessee. He further submitted that the provisions of section 72A, was brought in the statute for the purpose of setting off the accumulated losses under the head "profit and gain of business or profes....
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....under the head "Capital gains" assessable for that assessment year in respect of any other capital asset; (b) in so far as such loss relates to a long-term capital asset, it shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any other capital asset not being a short-term capital asset; (c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.] (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. 24. From the perusal of the above section, it is seen that the loss under the head "capital gain" is allowable to an assessee alone. There is no mention about the situation and the condition under which such a loss is allowed to be set-off and carried forward in the case of amalgamation, that is, to allow loss or set off loss of one assessee which has merged with another assessee. Likewise, in section 72, the provisions of carried forward and set-off of....
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....tain conditions or benefits or restrictions, the same has been provided categorically. For e.g., section 47, dealing with transactions not regarded as transfer, has provided specific clauses (vi) to (vid) for the cases of amalgamation and demerger. It is not the role of the Courts specifically the Tribunal to read such a specific provisions into general provisions. The casus omissus cannot be supplied by the Courts i.e., the Tribunal is not empowered to read down the provision of section 72, by importing the provisions of section 72A, into the said section. What is apparent from the clear language of the section and intention of the legislature has to be inferred and is to be applied. Had the legislature intended to allow set-off and carry forward of loss of capital gains in the case of amalgamation or demerger, the legislature could have provided specifically. Thus, in our humble opinion, section 74, cannot be read or interpreted so as to give benefit of set-off and carried forward of losses under the head capital gains in the case of amalgamation and demerger, sans any specific provision therein. No case laws to the contrary has been brought before us by the assessee. Thus, the v....