TaxTMI 
TaxTMI 
2018 (3) TMI 210
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....006-07 & 2007-08 respectively. First we take up assessee's appeal ITA No.3980/Mum/2013 for AY 2005-06. ITA No. 3980/Mum/2013 for AY 2005-06-Assessee's Appeal 2. Besides, one original ground of appeal, the assessee has also raised additional grounds of appeals vide letters dated 05/01/2018 & 10/01/2018. Since the same do not require appreciation of new facts and no objection has been raised by the revenue against the same, the same are taken on record. Finally, the effective grounds of appeal including additional grounds may be summed up as follows:- 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Appeals) erred in confirming the action of the assessing officer to treat the gain arising on sale of equity shares and mutual funds as business income instead of short term capital gain. 2. The Assessing Officer erred in indulging in double taxation in respect of gain on securitization which had already been taxed by him (as confirmed by the Tribunal for earlier years) as under: Assessment Year Amount(Rs.) 2003-04 4,75,04,976 2004-05 88,53,915 3. The Assessing Officer ....
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....No.1 before us. Ground No. 8 is an alternative ground which pleads for allowance of rebate u/s 88E against Securities Transaction Tax [STT] being paid by the assessee, in case the stand of revenue in this regard gets confirmed before us. 3.3 Ground Numbers 2 & 3 are related with gains on securitization of certain assets. The Ld. AO noted that the assessee reduced an amount of Rs. 6,13,49,875/- towards gain on securitization in its computation of income. The assessee contended that it was mere notional income and that too, capital in nature and tax could be levied only on real income earned by the assessee. However, not convinced, Ld. AO added net amount of Rs. 6,07,74,768/- to the income of the assessee. Upon further appeal, Ld. CIT(A) while concurring with the stand of Ld. AO granted partial relief to the extent of income already offered by the assessee from such securitization from AYs 2005-06 to 2008-09. Still aggrieved, the assessee is in further appeal before us. 3.4 Ground Numbers 4 to 6 pertains to disallowance u/s 14A. The assessee earned exempt dividend income from shares and mutual funds amounting to Rs. 1,52,20,378/- and contended that the investments were made out....
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....s been treated as investor right from AYs 1998-99 to AY 2004-05 and even in the impugned AY, the revenue has not disturbed the head of Long Term Capital Gains [LTCG] claimed as 'exempt' by the assessee. Our attention is further drawn to the fact that Ld.CIT(A), on similar facts, in AYs 2010-11 & 2011-12 concurred with the stand of the assessee against which revenue is in further appeal before the Tribunal. Reliance has been placed on various judicial pronouncement and CBDT circular to support the stand of the assessee. Upon perusal, It is evident from the ratios worked out by the assessee that profit on sale of investments constituted less than 2% of total revenue generated by the assessee. Further the ratio of average investment (except investment in group concerns) to average total assets was less than 2% and more than 92% of assessee's total assets were deployed in the business of financing. The said facts could not be controverted by the revenue. Further, a perusal of various assessment orders for earlier years as placed on record give strength to assessee's contention that the assessee has been treated as investor in the past with respect to Short Term Capital Gains on Shares ....
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....concessional rate of tax i.e., 10 per cent has been levied subject to the condition that transactions resulting into this type of gain must have suffered securities transaction tax. This is the first year of such change and, having regard to the quantum of gains, this scheme of taxation only, in our view, has prompted the Revenue Authorities to take a different view on the same types of transactions entered into by the assessee in earlier years. At this stage, we consider it fit to state that there is no dispute before us that assessee has claimed exemption under section 10(38) and/or has paid tax under section 111A at concessional rate on the transactions, where securities transaction tax has not been. It is also noted that the assessee has paid tax on short-term capital gains at normal rates on share transactions executed in the period prior to imposition of securities transactions tax. In our view, the legislative change of this nature, whereby no change has been made in respect of nature and modus operandi of such share transactions, resulting into any advantage cannot be taken away by the Revenue Authorities in this manner and in these circumstances, we are of the view that, p....
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....ears. Upon perusal of order of the Tribunal for AY 2004-05, we find that the assessee had raised issue of double taxation of Rs. 88.54 Lacs in that year also where the matter was remanded back to the file of Ld. AO to grant consequential relief to the assessee in view of the fact that entire gains on securitization were held to be taxable in that year only. It is altogether a new claim and therefore, while admitting the same, it is remitted back to the file of Ld. AO for consideration with a direction to the assessee to substantiate the same by providing details adequate details / explanation thereof for various assessment years failing which Ld. AO shall be at liberty to adjudicate the same on the basis of material available on record. Needless to add that addition on account of gain on securitization amounting to Rs. 6,13,49,875/- stands confirmed by us following the decision of this Tribunal in earlier years. The relief to the extent of income which is already offered to tax by the assessee in various assessment years shall be granted in respective assessment years only so as to avoid the double taxation of the same income. Resultantly, this ground stands allowed for statistical....
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....84 Lacs was deleted by the Tribunal upon noticing that owned funds far exceeded the investments made by the assessee and therefore, decided the matter in assessee's favor by following the ratio of the decision of Hon'ble Bombay High Court rendered in CIT Vs. HDFC Ltd. 366 ITR 505]. In the impugned AY, from perusal of financial statements, it has been noted that assessee's Share Capital and Reserves stood at Rs. 133.96 Crores as against investment of Rs. 62.35 Crores. Although, it is further noted that there was increase in investment to the tune of Rs. 21.70 crores in the impugned AY as against increase of Rs. 14.23 Crores in the Share Capital & free reserves, we find that the revenue has nowhere established the nexus between borrowed funds and investments but straightway computed the disallowance which was not fair and justified. Therefore, following the Tribunal's order for earlier years, since aggregate interest free owned funds far exceeded aggregate investment, drawing the presumption in assessee's favor, we delete the impugned addition. Resultantly, this ground of assessee's appeal succeeds. 5.6 Ground Number 7 is related with disallowance u/s 40(a)(ia) on account of delay....
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.... 2004-05 88,53,915 4. The Assessing Officer failed to consider that the Appellant had itself offered income in the current year, out of the amounts mentioned in Additional Ground No.1 above, on a spread-over basis in its Return of Income 5. Both the lower authorities erred in disallowing expenditure amounting to Rs. 18.49 lakhs by applying Rule 8D(2)(iii). 6. Both the lower authorities erred in applying Rule 8D for computing disallowance under section 14A for Assessment Year 2006-07. 7. Without prejudice to Ground Nos.3 and 4, the Appellant submits that the disallowance under section 14A does not lie in respect of those investments in respect of which dividend was not earned. 8. Having regard to the facts and circumstances of the case, the disallowance of expenditure under section 14A is highly excessive and needs to be reduced substantially. 9. Both the lower authorities erred in disallowing expenditure of Rs. 18.49 lakhs under section 14A for the purpose of computing book profit under section 115JB of the Income-tax Act. 10. Without prejudice to the Original Ground of Appeal No.1, in case it is held that t....
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....r right from AYs 2000-01 to 2003-04 vide ITA Nos. 6991- 94/Mum/2011 dated 05/05/2015 and also for AY 2004-05 ITA No.980/Mum/2012 dated 13/12/2017. Per Contra, Ld. DR vehemently opposed the same and contended that the transactions were merely in the nature of loans only and the lessees were the actual owner of the vehicles and hence, depreciation could not be allowed to the assessee. Upon perusal of sample agreements and other documents produced before us, we, prima-facie agrees with the stand of the revenue that the transactions were primarily in the nature of finance lease. However, be that as the case may be, the issue has consistently been decided by the Tribunal right from AYs 1995-06 onwards in assessee's favor and depreciation has been allowed to the assessee. The said orders have mainly relied upon the cited judgment of Hon'ble Apex Court. The revenue is not able to point out any differentiating facts in the impugned AY vis-à-vis facts of the earlier years. Therefore, we see no reason to deviate from the stand taken by several coordinate bench of this Tribunal and accordingly, adjudicate the matter in assessee's favour. The benefit of capital recovery or any other ....
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....as under: Assessment Year Amount(Rs.) 2003-04 4,75,04,976 2004-05 88,53,915 4. The Assessing Officer failed to consider that the Appellant had itself offered income in the current year, out of the amounts mentioned in Additional Ground No.1 above, on a spread-over basis in its Return of Income 5. Both the lower authorities erred in disallowing expenditure amounting to Rs. 14.33 lakhs by applying Rule 8D(2)(iii). 6. Both the lower authorities erred in applying Rule 8D for computing disallowance under section 14A for Assessment Year 2007-08. 7. Without prejudice to Ground Nos.3 and 4, the Appellant submits that the disallowance under section 14A does not lie in respect of those investments in respect of which dividend was not earned. 8. Having regard to the facts and circumstances of the case, the disallowance of expenditure under section 14A is highly excessive and needs to be reduced substantially. 9. Both the lower authorities erred in disallowing expenditure of Rs. 14.33 lakhs under section 14A for the purpose of computing book profit under section 115JB of the Income-tax Act. 10. W....