TaxTMI 
TaxTMI 
2022 (9) TMI 651
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....basis to deny the claim of exemption under section 10(38) of the Act. 1.2. That even otherwise, the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the claim not allowed in the assessment proceedings could be allowed during the appellate proceedings and in such circumstances, the judgment of the Hon'ble Apex Court in the case of Goetze (India) Ltd. vs. CIT reported in 284 ITR 323 have no application. 1.3. That the finding of the learned Commissioner of Income Tax (Appeals) that judgment of the Hon'ble Apex Court has no reference to CIT(A) and therefore, addition claim cannot be entertained by the Commissioner of Income Tax (Appeals) is based on fundamental misconception of facts and law and wholly unsustainable. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding addition of Rs.2,87,80,000/- by invoking section 56(2)(vii)(a) of the Act. 2.1. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that section 56(2)(vii)(a) of the Act had no application to the transactions of allotment of shares by write issue by JAM India Pvt. Ltd. and therefore....
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....acts in upholding the levy of interest under section 234B of the Act. Apropos Ground No.1. 3. On this issue, the Assessing Officer noted that vide letter dated 16.10.2017, it was submitted that the assessee has earned Long Term Capital Gain of Rs.4,05,241/-, which is exempt u/s 10(38) but due to oversight the assessee did not claim deduction and the same should be allowed. However, this plea of the assessee was rejected by the Assessing Officer by referring the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs CIT [2006] 157 Taxman 1 (SC). 4. Upon assessee's appeal, the Ld. CIT(A) upheld the order of the Assessing Officer. 5. Against this order, the assessee is in appeal before us. 6. We have heard both the parties and perused the records. We note that in the said order, Goetze (India) Ltd. (supra) the Hon'ble Apex Court has expounded that the said decision would not impinge upon the powers of ITAT in dealing with the claim otherwise than by revised return. Accordingly, we direct the Assessing Officer to consider this issue and decide as per law. Apropos Ground No.2 7. The assessee has made share investment of Rs. 8,04,00,000/- in M/s ....
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.... which would justify the shares purchased from Mr. Kunal Lalani & M/s Mega Airways Limited being valued at Rs. 32/- and Rs. 40/- when the FMV of the shares as per the valuation report got done by M/s JAM India Pvt. Ltd, is Rs,l03/«. The transaction of purchase of shares of M/s JAM India Pvt. Ltd. from Mr. Kunal Lalani & M/s Mega Airways Limited clearly attracts the provisions of Section 56(2)(viia)(ii) of the I.T, Act, 1961 and will be chargeable to tax under the head 'Income from other sources'. The transaction of rights issue of shares at below the FMV also attracts the provisions of Section 56(2)(viia)(ii) of the I.T. Act. 1961 and will be chargeable to tax under the head income from other sources'. The quantum of addition on this issue is calculated as under- Date of transaction Puchased from Rate at which purchased (Rs.) FMV Difference No of shares Addition 13.04.14 M/s Mega Airways Limited 40 103 63 200000 12600000 16,04.14 Mr. Kunal Lalani 32 103 71 200000 14200000 15.09.14 Rights Issue by company 100 103 3 565000 1695000 05.02.2015 Rights issue by company 100 103 3 95....
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.... 14. Against the above order, the assessee is in appeal before us. 15. We have heard both the parties and perused the records. The Ld. Counsel of the assessee relied upon the decision of ITAT in CIT vs M/s. Kilitch Healthcare India Ltd. & Ors. in ITA No.7061/Mum/2019, vide order dated 22.03.222 for the following proposition:- "30. We have heard both the parties and perused the records. Learned Counsel of the assessee pointed that application of valuation method adopted by the Assessing Officer is not applicable for A.Y. 2015-16 and the said method is applicable only from A.Y. 2018-19. That learned CIT(A) has rightly held that it cannot be applied retrospectively. We note that the Assessing Officer has invoked the provisions of section 56(2)(viia) of the Act. The same read as under: [(viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested,- (i) without consideration, the aggregate fair market value of....
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....xamine the issue on the basis of exposition in the case law pointed above. Needless to add, the assessee should be granted adequate opportunity of being heard. Apropos Ground No.3 18. On this issue, the Assessing Officer noted that the assessee has debited processing fees of Rs.25,74,864/- under the head 'Interest & Finance Costs'. Upon Assessing Officer's enquiry, it was submitted that Rs.7,74,864/- was paid as processing fees for purchase of business assets and the same is allowable as the loan has been taken for assets used for the business of the assessee. The Assessing Officer was of the opinion that the same cannot be allowed, hence he disallowed the claim of processing fees. 19. Upon assessee's appeal, the Ld. CIT(A) upheld the action of the Assessing Officer. 20. Against this order, the assessee is in appeal before us. 21. We have heard both the parties and perused the records. The Ld. counsel for the assessee submitted that the revenue authorities have erred in disallowing the expenditure by holding that processing fee for purchase of capital asset is capital expenditure. In this regard, he relied upon the decision of Hon'ble Supreme Court in the case of Ind....