TaxTMI 
TaxTMI 
2022 (7) TMI 382
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....mission of the assessee and delete the disallowance. It be so held now. 2. Ld. CIT(A) erred in law and on facts in confirming addition of Rs. 2,80,000/- for rental income received from Virtual BPO services ignoring fact that the possession of said property was taken over by State Bank of India under Securitization Act and subsequently all rental receipts are paid to State Bank of India by tenant and assessee do not have any intimation for the same. Ld. CIT(A) ought to have considered the factual submission and ought to have deleted the addition instead of giving direction for verification to AO. It be so held now. 3. Ld. CIT(A) erred in law and on facts in confirming addition of Rs. 20,66,182/- being Interest on FDRs as per AIR information ignoring fact that assessee has no information of such interest due to status of assessee account under Nonperforming Assets (NPA) category. Ld. CIT(A) ought to have considered the submission of the assessee and ought to have deleted the addition. It be so held now. 4. Without prejudice to the above ground no. 3 and in alternative, if addition of Rs. 20,66,182/- for interest on FDRs is being confirmed then appropriate d....
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....rs due to heavy recession in the international diamond trade. This affected the company very badly and company's operations were came into standstill in the year 2006-07. Company's account with consortium of 23 banks because NPA during the period and all the banks started recovery proceedings. The company had submitted its Restructuring proposal to the banks which was initially considered favourably by the banks but somewhere in 2007 few banks backed out and the whole restructuring process flopped. Company's all bank accounts, movable as well as immovable assets including all the assets of the promoters/directors were attached by the banks and sold under the process of securitization. 2. Alongwith the recovery proceedings under Securitization, criminal proceedings, 138 proceedings were also simultaneously started by the banks, other creditors. Some of the banks, (5 banks) viz. Punjab National Bank, Andhra Bank, UCO Bank, Vijaya Bank and State Bank of Hyderabad filed their complaints with CBI and CBI investigations were also started under which all the promoters/directors, senior executive staff members of the company were arrested, questioned. As such the staff....
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....d the prayer of the assessee for condonation of delay and stated that delay should not be condoned merely because assessee company became bankrupt and shut down its business. 6. We have heard both the parties on this preliminary issue. We note that bankers and institutions and other few big creditors initiated civil and criminal cases, against the assessee company, like Punjab State Warehousing Corporation, Chandigarh, Arbitration proceedings for recovery as well as 138 cases and NAKED recovery proceedings, arbitration as well as filed complaints with CBI and PMLA and staff members have also left the company hence it became very difficult to attend the income tax matters, therefore delay of 1384 days has occurred. We note that power to condone the delay is discretionary and the discretion must be judicially exercised. If there was sufficient cause for not presenting the appeal within the limitation period and assessee has demonstrated sufficient cause, the delay may be condoned. The words 'sufficient cause' should receive a liberal construction so as to advance substantial justice where no negligence is imputable to the applicant. We have gone through the affidavit filed....
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....ay the dues to SBI and such rent had been collected by SBI directly from the tenant and adjusted against the over dues of the assessee. Therefore, said rent income is the income of the assessee and adjustment of such receipt against over dues by SBI is in the nature of application of such receipts. Hence, it should be treated as rental income of the assessee. However, as requested by Ld. Counsel that TDS deducted from such receipts was not claimed by assessee, and if the said rental income is treated as income of the assessee, then in that circumstances, the assessee is entitled to claim the benefit of the TDS. We note that ld. CIT(A) has already given direction to the assessing officer that benefit of TDS should be granted to the assessee. We are of the view that assessee should be given credit of such TDS after verification of Form No. 26AS and TDS Certificate from party, if issued to SBI. Therefore, we direct the Assessing Officer to grant such credit of TDS, after proper verification. 16. In the result, ground no. 2 raised by the assessee is allowed for statistical purposes to the extent indicated above. 17. Ground Nos. 3 and 4 raised by the assessee relate to addition....
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....ed the assessing officer to verify from records about any of TDS so deducted from such interest on the basis of Form 26AS and TDS certificate so issued by respective bank and grant the credit to assessee. We also direct the assessing officer to include the interest income in the hands of assessee and benefit of TDS should be given to the assessee. Therefore, ground no. 3 and 4 are allowed to the extent indicated above. 22. Ground No. 5 raised by the assessee relates to disallowance of depreciation of Rs. 30,49,418/- for windmill sold during the year ignoring the fact that the block of windmill still remain/exist. 23. Brief facts qua the issue are that during the assessment proceedings, the AO verified from tax audit report in Form 3CD clause 14 for the previous year that assessee claimed depreciation of Rs. 30,49,418/- on W.D.V. of windmill of Rs. 38,11,773/- at the rate of 80%. The A.O. on being observed that assessee sold out windmills in previous year, called for assessee's explanation about whether the sale consideration of such windmill were reduced from WDV of windmill block or not, as per the provisions of the Act. The assessee though contended that same was reduce....
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.... 5 raised by the assessee is allowed. 27. Ground No. 6 raised by the assessee relates to disallowance of preliminary expenses of Rs. 6,10,000/-, treating it to be capital in nature. 28. So far ground No. 6 is concerned, the relevant material facts are that assessing officer disallowed preliminary Expenses (written off) of Rs. 6,10,000/-. The AO rejected assessee's explanation to the effect that these expanses are in the nature of deferred revenue expense and 10% of the same were being claimed by assessee. Therefore, assessing officer made addition at Rs. 6,10,000/-. 29. Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of the Assessing Officer. The Ld. Counsel for the assessee submitted that amount of Rs. 6,10,000/- is deferred preliminary expenses and Revenue in nature and assessee has been claiming since a long, therefore these preliminary expense should be allowed. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer. 30. We have heard both the parties and carefully gone through the submissions put forth on behalf o....
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....ds of the assessee. 34. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that A.O, has not worked out the short term capital gain as well as long term capital gain on account of such sale transactions. The ld. CIT(A) noted that out of total sale consideration of all the windmills at Rs. 28,90,67,060/-, it should be first reduced to Rs. 28,52,55,287/- because of opening WDV of balance windmills. It is therefore this surplus of Rs. 28,52,55,287/- has to be treated as short term capital gain as per provisions of section 50 of the I.T. Act. In the case of sale of land which were acquired in F.Y. 04-05 (land at Irrukundarai) and in F.Y. 05-06 (land at Andhiyur), these land were long term capital asset being acquired and kept for more than 36 months. The ld. CIT(A) noted that these lands were not depreciable assets. Therefore, the sale of these land for which separate consideration is received will result into long term capital (LTCG). The s....