AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 385
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.... Revenue has raised following grounds : 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 94,80,000/- from the total income treating it as capital receipt instead of revenue, without properly appreciating the facts of the case and the material brought on record. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 2. Briefly stated facts of the case are that assessee is a limited company engaged in the business of manufacturing and export of rubber and textile products. Income-tax r....
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....ecific exemption is provided under the Act in respect of such receipts. The definition of 'income' u7s. 2(24) is inclusive one and anything which can properly be descried as income is taxable under the Act unless exempt under one or other provisions of the Act. Even if the mount received on forfeiture of shares is treated as capital receipt, all capital receipts are not exempt from taxation. In view of the above, the contention of the assessee to treat the above receipts as capital receipts is hereby rejected. 3. Aggrieved, assessee went in appeal before ld. Commissioner of Income Tax(A) and succeeded in full as ld. Commissioner of Income Tax(A) following the decision of the Co-ordinate Bench, Ahmedabad in the case of DCIT (OSD),....
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....ant in terms of prospect and credited to capital reserve account was a capital receipt. The facts clearly show that the appellant had issued certain shares warrants which were subscribed by three companies. The amount received was credited to shareholders fund in the balance sheet. These applicants made part payment in pursuance to the share application. The issue of shares warrants was duly approved by Bombay Stock Exchange, as the appellant company a listed company on BSE. However, later on the share applicants did not make further payments and after informing the share applicant's and giving them the opportunity the appellant forfeited the amount of 10% of the share warrant paid by the applicants. It is observed from the documents gi....
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....h the records placed before us as well as the decision of the Co-ordinate Bench, Ahmedabad in the case of DCIT(OSD) vs. Brijlaxmi Leasing & Finance Ltd.(supra). Solitary grievance of the Revenue through this appeal is against the order of ld. Commissioner of Income Tax(A) deleting the addition of Rs. 94.80 lacs by treating the amount received on account of forfeiture of share application money by way of issue of share warrants as capital receipts as against ld. Assessing Officer 's order treating it to be revenue receipt. We observe that there is no dispute from the side of Revenue to the established fact that assessee received the application money of Rs. 94.80 lacs for technical textile project as per Security Exchange Board of India and ....
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....(supra) for his contention that forfeited amount is taxable as revenue receipt. However, we find that the facts of the case that were before the Hon'ble Supreme Court are distinguishable from the facts before us. In the instant case no security deposit or advance received for performance of the contract was forfeited. In fact, the amount received was against issue of shares and issue of shares is not the business of the assessee. The same cannot be treated as receipt in the normal course of the business of the assessee which is engaged in financing and leasing business. Further, the assessee has also not credited the forfeited amount in its profit & loss account but in contradistinction to that it has credited the same in capital reserv....