TaxTMI 
TaxTMI 
TaxTMI 
2019 (12) TMI 213
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....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 made suo moto disallowance of expenses u/s 14A of t....
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....01 & 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 very nominal. Keeping in view all these facts, it was held by the Tribunal that the be....
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....ties 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 lower authorities. 4.2. We have heard the rival submissions and perused the materials av....
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....8,784.81 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 table, it could be safely concluded that a sum of Rs. 63,10,678/- being the lease premium amortization is included in the total maintenance charges of Rs. 2,05,42,418/- which was debited by the assessee in the profit and loss account. We find th....
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....) 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 India Enterprises vs DCIT reported in 111 ITD 112 had allowed depreciation at the rate of 60% on computer software. Respectfully following the same, we direct the ld AO to grant depreciation at the rate of 60%. Accordingly, the Ground No. 5 raised by th....
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....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, Kolkatta, where the assessee company had its office. Against the said premises, assessee company had given a security deposit. The agreement period for this premises was from December 1, 2000 to November 30, 2005. After the termination of the agreement, GASPL failed to take back the possession of the premises and retur....
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....s 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 at the taxable income of the company on the grounds that the same did not fall under the provisions of any section, viz. Section 28 and/or Section 36 and/ or Section 37 of the Income-tax Act, 1961?" The facts of the case before the Hon'ble Bombay High Court are as under:- "2. The assessee-company is a non-resident company. It is e....
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.... 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 allowable as a business deduction, we hold that the amounts advanced by the assessee for the purpose of acquiring the factory on lease is an advance for the purpose of the assessee's business. 12. The question that arises for consideration is whether the fact that in the present case the amounts have been advanced to the landlord in pursuance of the agreement befo....
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....ssessee, 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. Having regard to the above discussion, the question posed before us is answered in the affirmative and in favour of the assessee. No order as to costs." 7.3.1. Similar view was rendered by the co-ordinate bench of this tribunal in the case of Abbott Healthcare (P) Ltd vs Additional CIT reported in (2019) 104 taxmann.com 143 (Mumbai- Trib) dated 30.1.2019 wherein the undersigned was t....
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....nd 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 passed by his predecessor in assessee's own case on the impugned issue for the Asst Years 2001-02 to 2005-06 and deleted the disallowance made by the ld AO. We find that this tribunal in assessee's own case for the Asst Year 2002-03 in ITA Nos. 3321 & 4045/Mum/2006 dated 30.12.2011 had decided this issue in favour of the assessee wherein this tribunal had placed reliance on the orders passed for th....
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....ment 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 computation of disallowance u/s 14A of the Act twice which had not been considered at all by the lower authorities. We are inclined to accept to the arguments of the ld AR that the revised claim of the assessee cannot be ignored merely on the ground that the same , if entertained, would result in reduction of returned income. It is well settled that there is no estoppel against the statute. Since the grievanc....