TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 368
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appeals on 24.09.2010 and 27.10.2009 respectively to consider the following substantial questions of law: 1. ITA 700/2009: (i) "Whether the Appellate Authorities were correct in holding that the income of Rs. 21,55,47,800/- earned on the sale of 50,000 equity shares of M/s.Diebold HMA P. Ltd., was liable to be brought to tax under the head "capital gains" and not "income from business" as held by the Assessing Officer despite the assessee increasing the profit and loss account in respect of the value of the shares for each assessment year from the date of purchase i.e., assessment year 1992-93? (ii) Whether the Appellate Authorities were correct in not taking into consideration the fact that the assessee had claimed travel expenditure, professional charges and other expenses in connection with sale of M/s.Diebold HMA P. Ltd., shares and especially when the assessee had no other business income during the current assessment year? (iii) Whether the sum of Rs. 24,93,800/- paid to M/s.Amarchand Mangaldas towards legal charges in respect of sale of M/s.Diebold HMA P. Ltd., shares is liable to be deducted from the sale value when computing capital gains tax when the actual payme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unts and accordingly disallowed the claim for deduction to the extent indicated hereinabove. However, CIT (A) held such payment had been reflected as advance (pre-paid professional-charges) in that year and it cannot be allowed while computing business income, but it has to be allowed in computing the long term capital gains, since assessee had incurred expenditure in sale of Diebold HMA shares and same is to be allowed in computing long term capital gains as claimed by assessee and his finding came to be affirmed by Tribunal. Further, assessing officer also disallowed a sum of Rs. 18,55,756/- claimed by the assessee as expenditure relating to abroad travel by the company's Managing Director and his wife on the ground that there was no business activity justifying their foreign travel for business purposes. A sum of Rs. 94,74,184/- claimed by the appellant as Rs.technical support charges' paid towards promotion of products and services in North America was also disallowed on the ground that the agreement relating to this activity had not been put into practice which came to be affirmed by CIT (A) and Tribunal. 4. Thus, revenue being aggrieved by the order of the Tribunal which aff....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee. He would also elaborate his submission by contending that professional charges paid to H.M.A.S., an American based company was on the basis of contract entered into by the assessee with the said Firm to render professional services in the form of market input and other issues as detailed in the contract and accordingly, as per the contractual term, a sum of $1,00,000 was to be paid as upfront amount and accordingly, it was paid. Non-consideration of said plea of the assessee in this perspective has resulted in great injustice to the assessee and hence, he prays for substantial questions of law being answered in favour of the assessee as formulated in ITA No.684/2009 and he would also pray for dismissal of the appeal filed by the revenue. 8. RE: FINDING ON SUBSTANTIAL QUESTION OF LAW NO.(1) FORMULATED IN ITA NO.700/2009. At the cost of repetition, it is noticed that assessee had purchased 50,000/- shares of M/s.Diebold HMA Private Limited during the year 1992-93 and sold the same during the previous year relevant to the assessment year 2004-05 for a total consideration of Rs. 21,55,47,800/- and declared a long term capital gain of Rs. 20,51,66,634/- in its return of inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d view that disallowance made by the assessing Officer insofar as foreign travel expenditure is concerned, requires to be affirmed by holding that the appellate authorities were correct in affirming the findings of the assessing Officer. 10. The assessing Officer disallowed a sum of Rs. 94,74,184/- claimed by the assessee as technical support charges towards promotion of products and services in North America on the ground that there was no business activities and the agreement on which the assessee based its claim was an agreement which was not put into practice. This finding of the assessing Officer came to be affirmed by CIT(A) as well as by the Tribunal. The assessee made payment of $1,00,000 on 14.07.2003 and $1,06,000 on 02.12.2003 based on an agreement dated 01.07.2003 contending interalia that such payment was made as per Clause (6) of the agreement and the recipient namely, HMAS was required to render professional services in the form of furnishing market input and other issues as detailed in the contract. Undisputedly, assessee did not place any material to show as to the actual implementation of the contract and the report which the consultant HMAS had to furnish to the....