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TaxTMI 
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2019 (11) TMI 746
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....06-07. All these appeals arise out of separate orders of learned Commissioner of Income Tax (Appeals), Mumbai. Since, these appeals relate to the same assessee and involve common issues, they have been clubbed together and, as a matter of convenience, disposed of in a combined order. ITA no. 2706/Mum/2008 Appeal by Revenue for A.Y. 2004-05 2. In ground no. 1, the Revenue has challenged the decision of learned Commissioner (Appeals) in excluding the receipts of Rs. . 52,04,70,961/- from the total receipt for computing deduction under section 80HHD of the Income Tax Act, 1961. 3. Briefly the facts are, the assessee, a resident company, carries on business as travel agent and tour operator. For the assessment year under dispute assessee filed his return of income on 31.10.2004 declaring total income of Rs. . 18,65,81,256/-. In course of assessment proceeding, the Assessing Officer noticing that the assessee has claimed deduction under section 80HHD of the Act called upon the assessee to furnish the necessary details. From the details furnished by the assessee, he found that the assessee has transferred a receipt of Rs. . 52,04,70,961/- to other hoteliers. Following the assessment o....
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....ght to our notice in the impugned assessment year, respectfully following the consistent view of the Tribunal in assessee's own case as referred to above, we uphold the decision of learned Commissioner (Appeals). Ground raised is dismissed. 5. In ground no. 2 Revenue has challenged the decision of learned Commissioner (Appeals) in excluding the unrealized tour receipts of Rs. . 63,90,733/- for the purpose of computing deduction under section 80HHD of the Act. 6. Briefly the facts are, while computing deduction under section 80HHD of the Act, the Assessing Officer included the unrealized receipts of Rs. . 63,90,733/- in the total business receipts. Assessee challenged the aforesaid decision of Assessing Officer before learned Commissioner (Appeals). Learned Commissioner (Appeals) having found that the Assessing Officer has included the unrealized receipts without making any discussion, held that such adjustment made by the Assessing Officer is unjustified. Accordingly, he allowed assessee's claim. 7. We have considered rival submissions and perused the materials on record. It is agreed before us by learned counsels appearing for the parties that the issue is covered in favour of ....
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....ly while deciding identical issue in assessee's own case in A.Y. 2002-03 (supra), the Tribunal following the decisions of the Hon'ble jurisdictional High Court in case of CIT vs. Syntel Limited (ITA no. 1974/2009) dated 15.12.2009 and in case of CIT vs. Rachana Udhyog 236 CTR 72 has held that the foreign exchange fluctuation gain has to be considered as part of foreign exchange receipt for computing deduction under section 80HHD of the Act. The same view was expressed by the Tribunal while deciding the issue in assessee's own case in A.Y. 2003-04 (supra). There being no difference in facts involved in the impugned assessment year, respectfully following the consistent view of the Tribunal in assessee's own case as referred to above, we uphold the decision of learned Commissioner (Appeals) on the issue. Ground raised is dismissed. 11. Ground no. 4 and 5 being general grounds do not require specific adjudication, hence, dismissed. 12. In the result, appeal is dismissed. ITA No. 3321/Mum/2008 (Appeal by the assessee for A.Y. 2004-05) 13. Ground no. 1 is against disallowance of interest paid of Rs. . 19,00,000/-. 14. Briefly the facts are, during the assessment proceedings, the A....
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....ss. He submitted, if the amount is not allowable under section 36(1) (iii) of the Act, it has to be allowed as business expenditure under section 37 of the Act. 18. We have considered rival submissions and perused the materials on record. Undisputedly, the assessee had availed loan of Rs. . 2 Crore from USG Buildwell Pvt. Ltd. in assessment year 2003-04. It appears from record, the aforesaid loan/advance was availed by the assessee against proposed sale of one of its property in Delhi as the assessee needed finance for its business activities. While completing the assessment in assessment year 2003-04 the Assessing Officer had treated the aforesaid loan/advance as unexplained cash credit under section 68 of the Act. For the very same reason, the Assessing Officer also disallowed the interest paid thereon. However, in proceeding before learned Commissioner (Appeals), the Assessing officer again verified the loan transaction and in the remand report accepted it to be genuine. On the basis of such remand report, learned Commissioner (Appeals) not only deleted the addition made under section 68 of the Act, but also allowed the interest expenditure. In the impugned assessment year, the....
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....ion alone but the assessee has acquired the ownership of tour club brand, trademark and goodwill. Thus, he held that the payment made by the assessee is inextricably linked with generation of capital asset. Accordingly, he agreed with the decision of the Assessing Officer in holding it as capital expenditure. 21. The learned AR submitted, identical issue came up for consideration in A.Y. 2002-03 and while deciding the issue the Tribunal allowed assessee's claim by treating it as Revenue expenditure. Without prejudice, the learned AR submitted, if the payment made is held as capital expenditure, the assessee should be allowed depreciation at the rate applicable to intangible assets. Further, he submitted, for such without prejudice claim assessee has raised an additional ground. 22. The learned DR relied upon the observations of the Assessing Officer and learned Commissioners (Appeals). 23. We have considered rival submissions and perused the materials on record. The short issue arising for consideration is, whether the payment made towards non compete fee is in the nature of capital or revenue expenditure. It is the contention of the assessee that the non compete fee was paid f....
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....earned during the year. Thus, he submitted, similar disallowance may be made in the impugned assessment year. 27. The learned DR relied upon the observations of learned Commissioner (Appeals). 28. We have considered rival submissions and perused the materials on record. Undisputedly, the assessee has earned exempt income during the year under consideration. Therefore, expenditure attributable to earning of exempt income has to be allowed in terms of section 14A of the Act. It is observed, while deciding identical issue in assessment year 2002-03, the Tribunal, in the order referred to above, has restricted the disallowance to 2% of the exempt income earned during the year. Facts being identical, respectfully following the decision of the Coordinate Bench in assessee's own case, we direct the Assessing Officer to restrict the disallowance to 2% of the exempt income. Ground raised is partly allowed. 29. In ground no. 4, assessee has contested the disallowance of Rs. . 50,00,000/-, being commission paid to PTC Holidays Private Limited. 30. Briefly the facts are, during the assessment proceeding, the Assessing Officer verifying the audit report found that an amount of Rs. . 50,00,0....
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.... particular expenditure concerning payment made to a related party, in the opinion of the Assessing Officer, is unreasonable and excessive having regard to the market rate, he may either disallow it or may allow it as per the market rate. Therefore, the Assessing Officer must establish on record that the payment made by the assessee to a related party is unreasonable and excesseive having regard to the market rate. On a careful reading of the assessment order, we are of the view that the Assessing Officer before disallowing the expenditure has not brought any material on record to demonstrate that the payment made by the assessee is unreasonable and excessive having regard to the market rate. Learned Commissioner (Appeals) also sustained the disallowance on a factual misconception that similar disallowance was sustained by the first Appellate Authority in A.Y. 2003-04. Whereas, in Assessment Year 2003-04, Learned Commissioner (Appeals) has actually deleted the disallowance made by the Assessing Officer, as evident from his order dated 06.12.2012. In fact, in assessment year 2002-03 also the Assessing Officer himself allowed the payment made to the very same party in the scrutiny a....
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....he assessee that this income is closely related to the business activity of the assessee. It is observed, the Revenue authorities have disallowed assessee's claim in absence of necessary details. It has been submitted before us by the learned AR that the assessee is in possession of all the details relating to the income earned and can establish its claim before the AO. Considering the above, we are inclined to restore the issue relating to assessee's claim of misc. income to be treated as business income for deduction under section 80HHD to the Assessing Officer for de novo adjudication after verifying the details to be filed by the assessee. Needless to mention, the Assessing Officer must afford a reasonable opportunity of being heard to the assessee before deciding the issue. Ground raised is partly allowed for statistical purposes. In the result appeal is partly allowed. ITA no. 5377/Mum/2012 (Appeal by the assessee for AY 2005-06) 38. The solitary issue in this appeal relates to disallowance of Rs. . 57,61,106/- under section 40A(2)(b) of the Act. 39. As could be seen, during the year assessee claimed deduction of Commission paid to a general commission agent, namely, PTC ....