2018 (2) TMI 1144

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....he Act". Heard both the parties. Case file perused. 2. We notice at the outset that the assessee's former three substantive grounds raise a common issue pertaining to software CT-Angio. It inter alia pleads that both the lower authorities have erred in treating the corresponding amount of acquisition thereof i.e. Rs. 11,14,000/- as unexplained receipt from M/s. Vibgyor Scientific Research Pvt. Ltd., disallowance of short term loss of Rs. 5,88,470/- pertaining to the very capital asset and the CIT(A)'s inaction in not adjudicating its alternative plea that its sponsorship claim of the above amount ought to be taxed u/s.28(iv) of the Act. All these three grounds involve a common set of facts. This assessee claimed sale of the above soft....

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.... discussion either in assessment or during lower appellate proceedings as to how three parties could have allegedly sponsored the same relevant software. Even if he assumed that the assessee's above sponsorship plea was not liable to be accepted, we do not see any justification as to how the resultant capital loss would be disallowed as the same would prima facie indicate a double addition of the very amount i.e. acquisition cost as well as loss arising from sale of the relevant capital asset. We therefore deem it appropriate that ld. CIT(A) needs to adjudicate this entire three folded issue once again as per law after affording adequate opportunity of hearing to the assessee to place on record all details. These three substantive grounds a....

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....evenue in this regard. In view of the long line of judicial precedents on the issue, we find merit in the contention of the assessee that proportionate disallowance of expenditure under Rule 8D(2)(ii) is not justified where the interest-free own capital together with reserves exceeds the corresponding investment. With reference to the disallowance made by the AO under Rule 8D2(iii) agitated by the assessee, we notice the averments made on behalf of the assessee that in tax-free income by way of dividend arises entirely out of mutual funds which are one time single investments without any proactive involvement of the management per se. The surplus fond of the company has been simply parked in the mutual funds. We take cognizance of the argum....