TaxTMI 
TaxTMI 
2017 (1) TMI 1629
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....nection with issue of bonus share of Rs. 2,10,168/-. 4. The A.O. has discussed this issue at para 5 on page 7 of his order wherein he has mentioned that on perusal of legal and professional charges, it is found that the assessee has debited expenses pertaining to issue of bonus shares in its revenue expenses. The A.O. was of the firm belief that such expenses are of capital in nature but does not fall within the ambit of section 35D of the Act since these expenditures have been incurred in relation to the issue of share capital (bonus share). The A.O. disallowed Rs. 2,10,168/-. 5. Assessee carried the matter before the ld. CIT(A) and explained that there was no issue of bonus share during the year under consideration, the A.O. has disallowed the expenditure totally on the wrong facts. 6. After considering the facts and the submissions, the First Appellate Authority observed that there is no mention of Rs. 2,10,168/- under head "Legal, duties, professional and legal charges". The First Appellate Authority found that the impugned expense was a routine yearly payment to National Depository Services Ltd., Central Depository Services Ltd., Bombay Stock Exchange Ltd. and Nationa....
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..... The ld. CIT(A) accordingly directed to delete this addition of Rs. 85,18,830/- 13. Before us, the ld. D.R. heavily relied upon the assessment order. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authority. We find that an identical issue was considered by the Bench in ITA No. 198/Ahd/2013 for A.Y. 2005-06 qua ground no. 1 of that appeal. The relevant findings of the Bench read as under:- 6. After hearing both the parties and perusing the record, we find that Hon'ble ITAT in the first inning has observed that Ld. CIT(A) without analyzing the relevant terms and conditions of various contracts in relation to the retention money and without recording his specific finding as to the method of accounting regularly followed by assessee upheld the order of the AO making the addition of Rs. 40,32,955/-. Hon'ble ITAT therefore restored the matter back to the file of Ld. CIT(A) with specific direction to decide the issue after analyzing the relevant terms and conditions of the contracts in relation to the retention money as to whether or not any amount retained by the respective customers actually accrued to the assessee in ....
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....orders in respect of various parties, has given categorical finding that the retention of 10% money of total sales was due to specific terms and conditions for final payment mentioned in the customer purchase order, it was further held that the assessee - company had been following this system of accounting for the last several years and was accepted by the department. The Commissioner (Appeals) further examined as to whether the assessee had made any deviation from the usual practice followed by it in the earlier years with an intention to evade tax and found that there was no such change during the year under appeal and whatever retention money had not been shown in that year and realized in the subsequent year had been shown as sale proceeds in that year and offered for tax. It is in these circumstances that the Commissioner (Appeals) was of the view that there was no need to disturb the method of accounting followed by the assessee - company and also found no discrepancy in terms and conditions of purchase orders. The Tribunal has concurred with the findings recorded by the Commissioner (Appeals). 6. From the facts and contentions noted hereinabove, it is amply clear t....
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....our of the assessee and against the revenue by the Hon'ble jurisdictional High Court in assessee's own case in Tax Appeal No. 928 of 2014. 21. We have given a thoughtful consideration to the orders of the authorities below. It is true that the investments have been made by the assessee in earlier financial years. This can be understood from the following chart:- Basic financial details from1998-99 to 2009-2010 Sr. Financial year Net worth(Capital + Turnover Profit Tax % inc.in Total debt Inc/Dec. Total Fixed Reserve surplus) before ta turnover as on last dt. in debt investment assets 1 1998-99 1735.34 (350 capital) 4544.13 475.28 101 10% 1306.0 - 456.85 1050 2 1999-2000 194 1.28 (350 capital) 6440.55 512.68 200 42% 1321.49 15.4 1217.8 1121 3 2000-2001 2166.81 (350 capital) 6822.2 482.96 161 7% 1636.21 285 1216.3 1279 4 2001-2002 2270.2 (350 capital) 6403.34 512.35 178 -7% 2378.11 742 1251 1595 5 2002-2003 2744.54 (350 capital) 9858.7 932.62 ....
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....xpenditure incurred by the assessee for earning the exempt income. There was no increase in borrowing rather there was reduction in total debts. Having regard to the above findings recorded by the Commissioner (Appeals), the Tribunal observed that it is now well settled that no disallowance under section 14A of the Act can be made of interest expenses until there is finding of Assessing Officer that borrowed funds were utilized by assessee to earn exempt income. It is in these circumstances, that the Tribunal did not find any infirmity in the order passed by the Commissioner (Appeals) in deleting the addition made by the Assessing Officer out of interest payment under section 14A of the Act. 8. From the facts noted hereinabove, it is apparent that the Commissioner (Appeals) has, after analyzing the material on record, found as a matter of fact that the assessee had sufficient surplus funds at its disposal for making any investment in share and for business purpose and therefore, there was no nexus that could be established with the expenditure incurred by the assessee for earning the exempt income. Thus, the conclusion arrived at by the Tribunal is based upon concurrent fi....
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.... 3443750 -3029948 Total 263088400 107265850 124084447 266450 124350897 138737503 30. The A.O. was of the opinion that the loss shown by the assessee from sale of shares of Apollo Industries and Projects Ltd. is a manipulated loss. The A.O. did not believe the sale of shares below its face value and accordingly treated the losses from the sale of shares as inflated on account of mutually arranged transaction. The A.O. accordingly disallowed the excess loss of shares amounting to Rs. 46,34,375/-. 31. Assessee carried the matter before the ld. CIT(A) but without any success. 32. Before us, the ld. counsel for the assessee drew our attention to the valuation certificate given by a Chartered Accountant who has done the valuation of the shares of Apollo Industries and Projects Ltd. It is the say of the ld. counsel that on the basis of this valuation certificate, the assessee sold the shares @ Rs. 1 per share. It was explained that the valuer has valued the nominal value of Rs. 10 at Rs. - 1.28 per share. The ld. counsel concluded by saying that the A.O. has not given any basis for rejecting this valuation. Per co....