TaxTMI 
TaxTMI 
2019 (12) TMI 213
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....Range 7(1) (hereinafter referred to as ld. AO). Since, the issues involved are identical in all these appeals, they are taken up together and disposed off by this common order for the sake of convenience. ITA No. 2687/Mum/2011 - Asst Year 2007-08 - Assessee Appeal 2. The Ground Nos. 1(a) and (b) raised by the assessee are challenging the disallowance u/s 14A of the Act read with Rule 8D of the Rules. 2.1. We have heard the rival submissions and perused the materials available on record. We find that the assessee company is engaged in the business of running a stock exchange. The main object of the assessee company is to facilitate, promote, assist, regulate and manage in public interest, dealings in securities of all kinds and to provide specialized advanced, automated and modern facilities for trading, clearing and settlement of securities and to ensure trading in a transparent, fair and open manner. During the year under consideration, the assessee claimed an amount of Rs. 27,42,86,081/- comprising of interest on tax free bonds of Rs. 9,32,86,760/- and dividend income of Rs. 18,09,99,321/- as exempt u/s 10 of the Act in the return of income. We find that the assessee mad....
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....e & Energy Services Ltd (formerly Indian Oil Tanking Limited) in ITA Nos. 1901 & 2585/Mum/2009 for Asst Year 2004-05 ; ITA Nos. 3477 & 3241/Mum/2009 for Asst Year 2005-06 ; ITA No. 2208/Mum/2010 for Asst Year 2006-07 ; ITA No. 7035/Mum/2010 for Asst Year 2007-08 and ITA No. 7430/Mum/2011 for Asst Year 2008-09 dated 17.5.2013 wherein it was held as under:- "19. As regards the premium and other charges paid in respect of leasehold land, the Id. Counsel for the assessee has submitted that although a similar issue has been decided by the- Tribunal against the assessed in A.Y. 1999-2000, the decision of Hon'ble Gujarat High Court in the case of Sun Pharmaceuticals Ind. reported in (2010) 329 ITR 479 rendered subsequently on a similar issue is in favour of the assessee. A perusal of the judgment passed by the Hon'ble Gujarat High Court in the said case shows that the Tribunal in that case had found on analysis of the relevant lease agreement that the land in question was not acquired by the assessee. The lease Deed was registered because as per the Registration Act it was compulsory to do so. There was no change in the ownership of the land and the lease rent payable was ver....
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....wherein the assessee is entitled to collect the same towards provision of certain facilities such as security , common usage etc. The assessee pleaded that maintenance charges, recovered as separate charges, were towards other facilities provided by the assessee company and the said charges were over and above the rental charges as per the terms of the agreement and amounted to reimbursement / recovery of expenses actually incurred by the assessee company. The assessee adjusted the recovery of these maintenance charges with the actual expenditure incurred thereon by crediting to the concerned expenditure account. The ld AO however disregarded the contentions of the assessee and proceeded to treat the maintenance charges collected as income from house property by placing reliance on the decision of Hon'ble Supreme Court in the case of Shambhu Investment (P) Ltd vs CIT reported in 120 Taxman 70 (SC). The assessee submitted that the said decision is factually distinguishable and also brought out the factual differences on record. The assessee placed reliance on certain decisions in support of its facts of the case. However, the contentions of the assessee were not appreciated by the l....
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....mmission charges for -Oracle India P. Ltd. Security Charges(Chennai) 5,108,030.00 1,394,061.00 417,830.00 322222.73 1519000 156996.5 2565.00 2,488,784.81 1,394,061.00 70,55523 Property Tax (Chennai) Housekeeping (Chennai} 260,596.00 1,181,073.00 15190.00, 15190.00 2565.00 2565.00 44,004.53 199,437.28 Total Expenses 41,909,565.08 20,542,418.50 Details of Maintenance Recovery Party Amt. (Rs.) Intel Technology India Pvt. Ltd. CA (India) Technologies Pvt- Ltd. 776,203.00 1,589,28400 NCDEX Oil & Natural Gas Corporation Ltd 3,712,533,00 8,352,512.00 Securities and Exchange Board of India Oracle India Pvt Ltd. Canara Bank 752,792, 00 1,492,640.00 185,609.00 16,85,1,573.00 4.2.1. We find that the ld AO had disallowed the lease amortization premium of Rs. 1,29,52,157/- as a separate line item while computing the income from business. From the above ta....
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....ch arguments and all arguments made by the ld AR are left open to be stated before the ld AO afresh. The assessee is also at liberty to adduce fresh evidences, if any, in support of its various contentions. Accordingly, the Ground Nos. 4(a) to 4(d) raised by the assessee are allowed for statistical purposes. 6. The Ground No. 5 raised by the assessee is with regard to the rate of depreciation on computer software. 6.1. We have heard the rival submissions. It is not in dispute that the assessee had made investment in purchase of software by way of lumpsum investment which would give enduring benefit. We find that the lower authorities had granted depreciation for the same at the rate of 25% by holding that the purchase of software amounts to acquisition of intangible assets in the form of rights / licences. Accordingly they had rejected the claim of higher rate of depreciation of the assessee at 60%. We find this issue has already been decided in favour of the assessee by this tribunal in assessee's own case for the Asst Year 2005-06 in ITA No. 3114 & 3047 /Mum/2009 dated 30.12.2011 wherein this tribunal by placing reliance on the Special Bench decision in the case of Amway In....
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....tioned assessment year. Further, similar deposits aggregating to Rs. 13720/- for erecting temporary monsoon protection sheds every year, at the rented premises of the assessee at Trade World are also written off as the same is not recoverable from the Municipal authorities. Details of the same are enclosed at Annexure4(b). It is submitted that the above deposits were given in the ordinary course so to ensure smooth running of the business. However, the same are still not recoverable inspite of possible efforts. The assessee has lost the hope of recovering these deposits, hence, these deposits were written off in the Profit & Loss Account being irrecoverable as 'Business Loss' in the ordinary course of its business. Since these deposits were given wholly and exclusively for the business purpose which could not be recovered, hence they are allowable under section 28 and 37(1) of the Income Tax Act, 1961 as business loss. Good hope Advisory Services Pvt. Ltd. (GASPL) - Rs. 5415354/- The assessee company had entered into renewable business service agreement with the party for part of premises at 1st floor, Ideal Plaza, Sarat Bose Road, Kolkat....
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....At the outset, we find that the assessee had given certain deposits as detailed supra in the ordinary course of its business. It is not in dispute that those deposits became irrecoverable despite several efforts taken by the assessee. It is not in dispute that these deposits were actually written off as irrecoverable in the books of the assessee and claimed as deduction in the return of income. We find that the genuineness of the aforesaid deposits paid to the parties in the ordinary course of business of the assessee company was never disputed by the revenue. Hence we hold that the said write off of deposits paid in the ordinary course of business would be allowable as a trading / business loss u/s 28 of the Act. We find that the ld AR had rightly placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of I.B.M. World Trade Corporation vs CIT reported in 186 ITR 412 (Bom). The question raised before the Hon'ble Bombay High Court is as under:- "Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in disallowing the amount of Rs. 1,08,088 having been written off during the previous year as a deduction in arriving....
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.... after sales. The factory premises, as the clause relied upon by Shri Dastur, viz., Clause IX(i)(j) of the agreement dated March 2, 1960, and Clause (2) of the agreement dated October 23, 1962, clearly indicated, was being acquired for its existing business. Moreover, as pointed out by Shri Dastur, the Income-tax Appellate Tribunal has rejected the claim of the assessee for a reason other than this reason. Accordingly, we proceed on the assumption that the factory premises were being acquired by the assessee on lease for the purpose of its existing business. 11. The lease was going to be initially for a period of ten years. There was, of course, a clause for renewal at the option of the assessee for a further period of five years. In view of this court's decision in Richardson Hindustan Ltd. v. CIT [1988] 169 ITR 516, in which, following the earlier decisions in CIT v. Hanftst Pharmaceutical Ltd. [1978] 113 ITR 877, CIT v. Bombay Cycle and Motor Agency Ltd. [1979] 118 ITR 42 and CIT v. Cinceita Private Ltd. [1982] 137 ITR 652, this court held that the period of lease was not of much relevance and that the expenditure incurred for acquiring premises on lease was allowab....
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.... acquisition of premises on lease would not ordinarily be in the capital field, we have no hesitation in holding that the moneys advanced by the assessee in pursuance of these agreements to the landlord for the purposes of and in connection with the acquisition of the premises on lease were for the purpose of business. Naturally, therefore, when such advances are lost to the assessee, the loss would be a business loss and not a capital loss. The decisions relied upon by Dr. Balasubramanian, according to us, have no bearing on the question involved herein. In the Supreme Court decision, the question was of a third party's liability to pay estate duty and the discharge by an assessee. It was obviously a purpose unconnected with the business of the assessee. The other two decisions, viz., Uttar Bharat Exchange Ltd. v. CIT [1965] 55 ITR 550 (Punj) and Taj Mahal Hotel v. CIT [1967] 66 ITR 303 (AP) refer to the expenditure incurred by an assessee on alterations and additions made by an assesses in leasehold premises. No doubt, such expenditure was held to be of capital nature. We fail to understand how those decisions have any bearing on the point in issue before us. 14. Hav....
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....r such claim. Hence, the Ground No.1 raised by the Revenue deserves to be dismissed on this count itself. Hence, in our considered opinion, the same is allowable as deduction u/s 28 of the Act, which have been rightly deleted by the ld. DRP, which does not require any interference. Accordingly, Ground No.1 raised by the Revenue is dismissed." 7.3.2. In view of our aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we direct the ld AO to grant deduction towards the business deposits written of as irrecoverable in the sum of Rs. 58,23,274/- . Accordingly, the Ground No. 6 raised by the assessee is allowed. 8. In the result, the appeal of the assessee in ITA No. 2687/Mum/2011 for Asst Year 2007-08 is partly allowed for statistical purposes. ITA No. 1751/Mum/2011 - Asst Year 2007-08 - Revenue Appeal 9. The only issue to be decided in this appeal is as to whether the ld CITA was justified in deleting the disallowance of depreciation of Rs. 2,44,59,550/- on equipments of VSAT network in the facts and circumstances of the case. 10. We have heard the rival submissions. We find that the ld CITA had placed reliance on the orders ....
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....in the return of income was excessive and that the correct amount of disallowance would only be Rs. 1,55,93,916/- and requested for adoption of the revised figure of disallowance u/s 14A of the Act while completing the assessment. This disallowance was worked out by the assessee based on the salary of certain top executives of the assessee company together with certain indirect expenses attributable for investment activity. We find that the ld AO did not heed to the request of the assessee to disallow the revised sum of Rs. 1,55,93,916/- as it would go below the returned income of the assessee and accordingly did not make any disallowance in the assessment. In other words, the disallowance suo moto made by the assessee in the return of income u/s 14A of the Act in the sum of Rs. 2,14,67,000/- was retained in the assessment. We find that before the ld CITA, the assessee had further sought to reduce the amount of disallowance u/s 14A of the Act read with Rule 8D(2)(iii) of the Rules to Rs. 32,41,762/- . We find that the ld CITA however upheld the action of the ld AO in retaining the disallowance figure u/s 14A of the Act to Rs. 2,14,67,000/-. We find that the assessee had revised the....