TaxTMI 
TaxTMI 
2022 (6) TMI 1460
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....made by the Assessing Officer comprise of revenue expenditure of Rs.8,42,02,053/-, capital expenditure on Research & Development of Rs,2,70,60,585/-/-, depreciation of the current year of Rs.45, 10,098/- and depreciation on opening WDV of Rs.5,33,2501- (total Rs. I 1,58,25,986/-) and the assessee had itself admitted that there was a difference in the claim of Research & Development expenditure and that the assessee had claimed excess deduction u/s. 35 (2AB) and excess depreciation. 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in allowing depreciation (c) 60% on the software purchased by the assessee clubbing the same with the computer hardware ignoring the fact that software as an intangible asset was entitled for depreciation only (c) 25% u/s. 32( l)(ii) of the Income-tax Act, 196 1 since software purchased is not a product but only is in nature of a commercial right. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow depreciation in respect of the assets transferred to the assessee as a result of merger of BMIL & PHL in the manner computed by the asses....
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....ing the fact that the entire scheme of demerger of Tools Division with the assessee company is not valid and is only the method designed to benefit the assessee company in order to claim the benefits of brought forward losses u/s. 72 A of the Act under the guise of demerger. 9. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO restore the appellant craves leave to amend or alter any ground or add a new ground that may be necessary. 2. The brief facts of the case are that the assessee company is engaged in the business of manufacturing and sale of pharmaceuticals and it deals in both prescription and OTC products as well as bulk drugs, chemicals and skin care products. The assessee has filed the return of income for the A.Y 2004-05 on 28.10.2004 disclosing a total income of Rs. 3,02,91,080/- under the normal provisions of income tax and u/s 115JB of the Act Rs. 181,19,56,123/-. The return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) of the Act was issued. In compliance the Ld. AR of the assessee appeared from time to time and submitted the details and ....
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....he income tax records. Similarly, the sale by the assessee of its glass division and the bulk drug division in A.Y 1999-00 was considered by the AO to be an itemized sale of assets as against the claim of the assessee that the same was slump sale. As detailed in the assessment order of A.Y 1999-00, the block of assets is reduced by the sale value as recorded in the books of the purchasing company and continuing with the consistent stand of the earlier years, the WDV is reduced and depreciation is reworked, vide annexure-I, as per which the excess depreciation is Rs. 3,87,47,001/-. 3. The A.O based on the tax audit report dealt (vi) on the of Modvat credit and valuation of closing stock as disclosed in Form No. 3CD. The A.O was not satisfied with the method of treatment of Modvat Credit and discussed elaborately on quantitative details and valuation of closing stock at Para 10.1 to 10.14 of the order and made addition being increase in value of closing stock of Rs. 11,77,76,480/-. (vii) The A.O. find that the assessee has obtained interest bearing loan for purchase of equity and has disallowed the interest on loan of Rs.2,87,00,000/- and observed at Para 11.4 of the order read as....
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....he assessee also submitted. during the course of assessment proceedings that this issue was already discussed in detail in the assessment orders of AY 2002-03 and 2003-04, and our submissions made there under may also he considered for the current year as well. The contents of the assessee's letter filed for AY 2003-04, are reproduced here under: Vide para no. 15 of the Order u/ s. 143(3) for A . Y. 200203, while completing the assessment, the A.O. has reduced our claim for depreciation in the block of building - factory / office (10%), by considering the entire value of the agreement for the sale of RP1L House as having been received for the previous year pertaining to A. Y. 2002-03. This has resulted in the entire sale proceeds relating to building out of Rs.84.50 crs which was to be received over a number of years, being reduced from the said block in the previous year relevant to A.Y 2002- 03. This has eventually resulted in. the said block being reduced to NIL. As per the contention of the assessee company, the transfer of RP1L House is intended to be completed in installments over a period of 4 years. Accordingly, in the previous year relevant to the current A. Y....
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.... Rs.4,76, 19,394 (including additional compensation received of Rs.71,92,815) is hereby taxed as income from Other Sources. There are no expenses incurred in relation to this income and hence no deductions are allowable. Hence the entire rents received of Rs.4,76, 19,394 (including additional compensation received of Rs.71,92,815) is hereby brought to tax under the head "income from Other Sources" without allowing any deductions / expenses. Addition: Income from other sources Rs. 4,75,19,394/-. 7. The A,O dealt on issue (xi) set off of losses/ depreciation on amalgamation, the AO dealt at Para 17.7 to 17.15 of the order on the provisions of Sec. 72A of the Act, scheme of amalgamation, demerger and notes on Accounts and observed that the entire loss from the tools division is not allowed to set off and denied the claim of brought forward losses of Rs.2,34,54,04,405/-.(Xii) the A.O. dealt on the allowance of depreciation and computation of book profit u/s 115JB of the Act and computing the claim of deduction u/sec. 80HHC of the Act at Para 18.1 to 18.9 and in particular at Para 18.9 read as under: 18.9 A plain reading of the above Explanation (iv) leads to the co....
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.... specifically brought out in the contentions of the appellant. Further, the AO is also directed to delete the disallowance of excess depreciation amounting to Rs.45,10,098/- of the current year and Rs.53,2501- on the opening written down value(WDV). In the result this ground of appeal is allowed for statistical purpose. We find the Ld.AR has filed the working of disallowance U/sec. 35(2AB) of the Act which explains the nature of expenditure, actual expenses debited to profit &loss account, claim made in the return of income and the assessee claim before the DSIR and the revised claim. The workings tally with the net disallowance restriction directed by the CIT(A) to A.O. The Ld. DR could not controvert the above findings of restoration to the file of A.O. and we do not find merit in this ground of appeal of the revenue and is dismissed. 12. On the claim of depreciation on computer software. We find that the CIT(A) has dealt at Para 2 and observed at page 6 as under and partly allowed the ground of appeal: The submissions of the appellant as well as the contentions of the AO were duly considered. After giving due consideration I am of the opinion the....
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....ders of my learned predecessor, the AO is directed to allow the depreciation as claimed by the appellant in respect of assets of BMIL. In the case of PHL the said concern had not claimed depreciation for AY 199697. The depreciation was thrust upon the A.O. My learned predecessor had held that the A.O. was not justified to thrust upon the depreciation. In view of this decision of my learned predecessor and the decisions of my learned predecessors in the case of the appellant itself for A. Yrs. 1997- 98, 1998-99, 1999-200, 2000-01, 2001-02, 200203, and 2003- 04, the A.O. is directed that the depreciation not claimed by BMIL and M/s. PHL should not be considered for the purpose of working out the WDV and consequently allowing depreciation thereon. In the result this ground of appeal is allowed. Further we find in the assessee's own case for the A.Y 1997-98 to 2003-04 & 2009-10 to 2010-11, the Hon'ble Tribunal has decided the issue in favour of the assessee In ITA no1754/Mum/2015 for the A.Y 2010-11 at Para 18 to 20 of the order read as under: 18. The next issue that came up for our consideration from ground No.5 of assessee appeal is disallowances of claim of depr....
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....Mahendra Mills (2000) 159 CTR (SC) 381, had concluded that in the absence of a claim of depreciation by the assessee, the same could not have been thrust upon it even if the particulars were available with the AO. We have perused the order of the Tribunal for A.Y. 2008-09 and finding no reason to take a different view, respectfully follow the same. Apart there from, we are also in agreement with the ld. A.R that now when the DRP while disposing off the objections filed by the assessee had specifically directed the A.O to allow claim of depreciation as was raised by the assessee in respect of BMIL, therefore, there was no reason for the A.O to have not followed such directions while passing the final assessment order u/s 143(3) r.w.s 144C(13), dated 28.01.2014. In terms of our aforesaid observations, we direct the A.O to allow the assesses claim of depreciation insofar the assets of BMIL are concerned. 19. As regards the claim of depreciation raised by the assessee on the assets of PHL which w.e.f 01.06.1996 were taken over by the assessee under a scheme of arrangement duly sanctioned by the Hon'ble High Court of Bombay, vide its order dated 14.08.1997, we find that the ass....
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....ars, therefore, we find no infirmity in the order of the DRP who had rightly directed the A.O to allow depreciation to the assessee on the basis of the outcome of the main appeal. In terms of our aforesaid observations the Ground of appeal No. IV raised by the assessee is partly allowed. 20. In this view of the matter and consistent with view taken by the co-ordinate bench, we direct the Ld. AO to allowed depreciation as claimed by the assessee on BMIL and PHL units. We find the Hon'ble Tribunal has considered the facts, provisions of the Act and judicial decisions and directed the A.O. to allow the depreciation. In the present case the facts are identical and CIT(A) has relied on the earlier years decision and granted the relief. We rely on the decision of the Hon'ble Tribunal and findings of the CIT(A) and up held the same as decided in favour of the assessee. Accordingly we dismiss this ground of appeal of the revenue. 14. The fourth disputed issue being the Addition u/s 145A of the Act with respect to modvat credit. We find that the CIT(A) has granted relief and observed at Para 6 read as under: 6. I have duly examined the issue and have studied the subm....
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....56 lakhs and the net addition on account of unutilised MODVAT credit was made by the ld. AO at Rs.66,27,443/-. This action of the ld. AO was upheld by the ld. CIT(A). We find that this issue was the subject matter of adjudication by this Tribunal in assessee's own case for A.Y.2009-10 in ITA Nos.1257/Mum/2014 & 1486/Mum/2014 dated 07/05/2019 wherein it was held as under:- "Adjustment of Inventory as per Sec. 145A : Rs. 1,16,08,088 21. We shall now advert to the contention of the ld. A.R that the A.O/DRP had erred in re-computing the value of the "closing stock‟ at Rs. 15,982.73 lacs as against Rs. 14,834 lacs and "opening stock‟ at Rs. 14,367.65 lacs as against Rs. 13,335 lacs, on the ground that the assessee is following exclusive method of accounting for MODVAT with regards to its inventory. It is the claim of the ld. A.R that irrespective of whether the assessee follows Inclusive or Exclusive method of valuation of stock, the amount of unutilized MODVAT shall have no bearing on the profits of the assessee. We find that the assessee had before the lower authorities objected to the aforesaid addition as was sought to be made by the A.O on three counts viz. (i)....
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....s "Annexure B‟. 22. We have deliberated at length on the issue under consideration and find that the assessee for the purpose of its statutory accounts had followed the AS-2 on Valuation of Inventories, and the Guidance Note on Accounting Treatment of MODVAT/CENVAT issued by the ICAI. Accordingly, the assessee had followed the exclusive method for accounting purposes. However, for the purposes of income tax it had worked out the impact of grossing up of tax, duty, cess etc. by restating the values of purchases and inventories by including inter alia the CENVAT credit. The adjustment required u/s 145A of the I.T Act was reflected in Clause 12(b) of the tax audit report of the assessee. As per Clause 12(b) the adjustment u/s 145A worked out at Nil. It is the claim of the assessee that the amount reflected in Clause 12(b) of the tax Audit report shall be treated as the adjustment required u/s 145A, and in support thereof had relied on the order of the ITAT, Mumbai in the case of Hawkins Cookers Ltd. Vs. ITO (2008) 14 DTR 206 (Mum). We have perused Clause 12(b) (Page 61 of "APB‟) of the Tax Audit report of the assessee and find that it is the claim of the assessee that the ....
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....similar issue has been decided in the assessee favour by the Honble Tribunal in ITA no.4000/Mum/2007 & others for A.Y.2003-04 dated 510-2021 at page 37 Para 13 to 13.2 read as under: 13. The ground No.III raised by the assessee is with regard to challenging the action of the ld. CIT(A) granting deduction only in respect of 1/5th of the expenditure in respect of payment made to M/s. Accenture by applying the provisions of section 35DD of the Act as against the claim of deduction of the whole expenditure u/s. 37(1) of the Act by the assessee. 13.1. We have heard rival submissions and perused the materials available on record. We find that the very same issue was the subject matter of adjudication by this Tribunal in assessee's own case in ITA No.3927/Mum/2006 dated 20/02/2020 for A.Y.2002-03 wherein it was held that assessee would be eligible for deduction ITA No.4000/Mum/2007 & 4345/Mum/2007 M/s. Piramal Enterprises Limited 38 u/s. 37(1) of the Act. We find that the ld. CIT(A) had merely placed reliance on the decision of his predecessor in A.Y.2002-03 and directed the ld. AO to allow deduction u/s. 35DD of the Act in respect of the subject mentioned payment. We fi....
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....th NPIL and the resultant profitability that the resultant merged entity would derive in short to medium term. Hence, it is a clear case of simple professional services rendered by Accenture to the assessee which at any cost cannot be considered as a capital in nature. We find that the said expenditure has to be considered as wholly and exclusively as deduction u/s. 37(1) of the ITA No.4000/Mum/2007 & 4345/Mum/2007 M/s. Piramal Enterprises Limited 39 Act. We hold that the provisions of Section 35DD of the Act as alleged by the ld. CIT(A) cannot be made applicable in the instant case as admittedly the same only refers to expenses incurred pursuant to amalgamation. Hence, we direct the ld. AO to grant deduction of the said expenditure u/s. 37(1) of the Act. Accordingly, the ground Nos. IV and IV(i) raised by the assessee are allowed and Ground No.4 raised by the revenue is dismissed." 13.2. Respectfully following the same, the ground No.III raised by the assessee is allowed. The Ld.DR fairly accepted the decision of the Honble Tribunal in the earlier years . We find the Ld.AR relied on the order of the ITAT on the claim of consultancy charges as discussed and judicial dec....
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....ces‟ by consequentially denying 30% standard deduction u/s. 24(a) of the Act. The ld. AO however, observed that assessee would be eligible only for deduction that qualify u/s. 57(iii) of the Act. 19.2. The ld. CIT(A) upheld the action of the ld. AO in respect of treatment of rental income from RPIL house as income from other sources. However, with regard to rental income derived from Centre Point, he directed the ld. AO to treat the rental income as "income from other house property‟ and grant statutory deduction in terms of Section 24(a) of the Act. Against this direction, the revenue is not in appeal before us. We find that the ownership of the RPIL House vests with the assessee for four years and hence, assessee continued to be the owner of the part premises of RPIL House and hence, the rental income thereon should be assessed only under the head "income from house property‟ and assessee would be entitled for statutory deduction @30% u/s. 24(a) of the Act for the same. Accordingly, the ground No. IX raised by the assessee is allowed. We find the Honble Tribunal has held that the transfer of ownership has to be completed over a period of 4 years and ....
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.... 80HHC of the Act. The ld. CIT(A) by placing reliance on the decision of the Special Bench of this Tribunal in the case of Syncom Formulations India Pvt. Ltd., reported in 106 ITD 193 granted relief to the assessee in this regard. We find that this issue is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of CIT vs. Bhari Information Technology Systems (P) Ltd., reported in 340 ITR 593 (SC) wherein the decision of the Mumbai Tribunal Special Bench in the case of Syncom Formulations India Pvt. Ltd., referred to supra had been duly approved by the Hon'ble Apex Court. Though this decision was rendered by the Hon'ble Apex Court in the context of claiming deduction u/s. 80HHE of the Act vis-à-vis computation of book profits u/s. 115JA of the Act, the same analogy would apply to the issue in dispute before us. We find that the Hon'ble Apex Court had held that deduction u/s. 80HHE had to be worked out on the basis of adjusted book profit u/s. 115JA of the Act and not on the basis of profits computed under regular provisions of law applicable to computation of profits and gains of business. Respectfully following the same, we do not find any inf....
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....levelled by the ld. DR that these transactions tantamount to colourable device in this aspect is also dismissed. It is not in dispute that GBDFC got merged with the assessee company with appointed date effective from 01/01/2003 pursuant to the order of the Hon'ble Bombay High Court approving the scheme of amalgamation on 20/02/2003. It is not in dispute that pursuant to such amalgamation, all the assets and liabilities of GBDFC as on the date of amalgamation got vested with the assessee company with effect from the appointed date. Hence on the date of amalgamation, what is to be seen is whether GBDFC had accumulated losses in its kitty or not, along with other assets and liabilities. It is not in dispute that GBDFC had accumulated losses in the form of unabsorbed business losses and unabsorbed depreciation on the date of amalgamation with assessee. It could not be brushed aside that the assets and liabilities on the date of amalgamation together with the details of losses available thereon in the hands of GBDFC was duly placed before the Hon'ble Bombay High Court along with the scheme of amalgamation while seeking approval. We hold that once the scheme of merger was duly approved b....
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....04 had categorically held that once the merger scheme had been sanctioned with effect from the particular date by the Hon'ble Court, it is binding on everyone including the statutory authorities. Similar is the view rendered by the Hon'ble Jurisdictional High Court in the case of Casby CFS (P) Ltd., In Ra reported in 231 Taxman 89 (Bom) dated 19/03/2015. 7.2 Further, we also find that the Hon'ble Supreme Court in the case of J.K.(Bombay) P. Ltd., vs. New Kaiser-I- Hind Spinning Weaving Company reported in AIR 1970 AIR 1041 had held as under:- "The principle is that a scheme sanctioned by the court does not operate as a mere agreement between the parties; it becomes binding on the company, the creditors and the shareholders and has statutory force, and therefore, the joint-debtor could not invoke the principle of accord and satisfaction. By virtue of the provisions of sec. 391 of the Act, a scheme is statutorily binding even on creditors, and shareholders who dissented from or opposed to its being sanctioned. It has statutory force in that sense and therefore cannot be altered except with the sanction of the Court even if the shareholders and the creditors acquiesc....
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....ned in sub-section (1), the accumulated loss shall not be set off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company- (i) holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation; (ii) continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation; (iii) fulfils such other conditions as may be prescribed to ensure the revival of the business of the amalgamating company or to ensure that the amalgamation is for genuine business purpose." 7.7. There is absolutely no dispute that assessee in the instant case had fulfilled all the three conditions cumulatively. There is absolutely no dispute that assessee has also fulfilled the requirement stipulated in Rule 9C of the rules by using minimum 50% of installed capacity of amalgamating company within a period of four years and which fact should also be supported by a certificate from a Chartered Accountant in Form No.62. A certificate from an Accountant in the Form No....
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....tio of the decisions of Hon'ble Tribunal and dismissed the grounds of appeal of the revenue. 24. In the result, the appeal filed by the revenue is dismissed. ITA No. 769/Mum/2008, A.Y 2004-05 25. The assessee has raised the following grounds of appeal. GROUND I: Disallowance of depreciation on computer software: Rs. 17,57,338/- 1. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) - XIX ("the CIT (A)") erred in upholding the action of the Additional Commissioner of Income Tax, Circle 7(1), Mumbai ("the AO") in recalculating depreciation on computer software @ 25% instead of @ 60% as claimed by the Appellant and thereby disallowing depreciation to the extent of Rs. 17,57,338/- on the alleged ground that computer software is different from computers. 2. He failed to appreciate and ought to have held that software purchases are for upgrading the computers and for using computers with latest technology and hence the purchases are wholly and exclusively related to use of the computers and hence are correctly shown as additions under the head computers and depreciation @ 60% is allowable on ....
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.... laid down in judicial pronouncements. As per provisions of section 36(1)(iii) as was applicable to the year under appeal, interest paid on capital borrowed for the purpose of the business should be allowed irrespective of whether it was utilised for acquiring revenue asset or capital asset. 3. The Appellant therefore prays that aforesaid disallowance of interest charges made by the AO be deleted. GROUND V: Capital Gain on sale of RP House property: Rs.2,45,44,7681- On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO of not reducing Long Term Capital Gain of Rs.2,45,44,768/- arising on proportionate sale of Rhone Poulenc ("RP") House Property being land from the Return of Income on the protective basis. 2. The Appellant prays that A.O be directed to reduce Long term Capital Gain of Rs.2,45,44,768/- from the Return of Income. GROUND VI: Depreciation on RP House Property building: On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in not allowing depreciation on proportionate sale of Building by reducing e....
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....m of the opinion the computer software is different from Computer and the rate of depreciation should be 25% as held by the A.O. However, since the appellant had claimed only 17,67,338/- as depreciation, the disallowance should be restricted to Rs. 17,67,338/-. In the result this ground of appeal is partly allowed. 27. The Ld. AR mentioned that the Hon'ble Tribunal in ITA.No.1754/Mum/2015 for the A.Y 2010-11 dated 15-01-2020 has granted relief to the assessee referred at Page 13 Para 14 to 17 read as under: 14. The next issue that came up for our consideration from ground No. 4 of assessee appeal is disallowances of claim of depreciation on additions to computer software of Rs. 2,82,05,985/-. The facts with regard to the impugned disputes are that during the course of assessment proceedings, the Ld. AO noticed that the assesee had incurred software expenses on up gradation of its existing software namely MFGPRO, MS-office, etc and claimed depreciation @ 60% as applicable to computer software. The Ld. AO was of the opinion that as per Rule 5 of the I.T. Rules, 1962 only computers, including software were eligible for depreciation @ 60%, when the computers were p....
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....s hereinabove, had taken support of the judgment of the Hon'ble High Court Bombay in the case of CIT Vs. Saraswat Infotech Ltd. [ITA (L) No. 1243 of 2012; dated 15.01.2013]. Apart there from, we find that further in the following cases also the coordinate benches of the Tribunal had concluded that depreciation on software expenses is allowable @ 60%: "(i) Sriniovasa Rsorts Vs. ACIT (41 taxmann.com 350) (Hyd-Trib) (ii). Ushodaya Enterprises Limited 938 ITR (T) 148 ) (Hyd-Trib) (iii). ACIT Vs. Zydus Infrastructure (P) Ltd. (72 taxmann.com 199) (AhdTrib) 16. We are persuaded to subscribe to the view taken by the aforesaid coordinate benches of the Tribunal and respectfully follow the same. Further, as observed hereinabove, the assesses claim of depreciation on software expense @ 60% which was allowed by the CIT(A) had also been accepted by the revenue and the same had also not been carried any further in appeal before the Tribunal. In terms of our aforesaid observations, we are of the considered view that the assessee had rightly claimed depreciation on computer software @ 60%. We thus set aside the order of the CIT(A) in context of the issue under consideration and ....
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....rdingly, I direct the A.O. to restrict the disallowance to net unutilized modvat credit after doing necessary rectification as pointed out by the Appellant in rectification application. In the result this ground of appeal is partly allowed. 31. The Ld. AR contended that this issue has been dealt by the Hon'ble Tribunal in ITA.No.1754/Mum/2015 for the A.Y 2010-11 dated 1501-2020 and was restored to the file of the A.O and allowed for statistical purposes as observed at page 17 Para 22&23 of the order read as under: 22. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that a similar issue has been considered by the co-ordinate bench for AY 2009-10 and after considering relevant facts has restored the matter back to the file of the Ld. AO to verify the claim of the assessee that impact of grossing up of tax, duty, cess, etc by revaluing the purchases and inventories by inter alia including the effect of CENVAT credit would be nill. The relevant findings of the Tribunal are as under:- 22. We have deliberated at length on the issue under consideration and find that the assesse....
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....10 &2010-11. The Ld.DR fairly accepted the decisions of the ITAT. Accordingly, we fallow the judicial precedence and restore the issue to the file of the Assessing officer on similar directions and allow the ground of appeal for statistical purpose. 33. The fourth disputed issue on disallowance of interest on loan taken for purchase of a capital asset(Shares of RPIL). We find that the CIT(A) has dealt at Para 7 page 21 as under: Ground No VII Disallowance of interest on loan taken for purchase of Equity Rs 2,87,00,000/- In this ground, the Appellant has contended that the AO has erred in disallowing interst expenditure amounting to RS. 2.87 crores paid to various banks on the ground that the payment was made for a loan which was utilized for acquiring a capital asset and accordingly, amount expended was capital in nature. This issue has come up for decision in the case of Appellant for A.Y. 2002-03 and 2003-04 wherein my predecessor had confirmed the disallowance. Accordingly, following the decision of the earlier year, I confirm the disallowance for this year also. In the result this ground of appeal is dismissed. 34. Further at the time of hearing....
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....e same was introduced in the statute only with effect from Asst Year 2004-05 and not applicable for earlier years. 6.11. We find that the ratio laid down by the Hon'ble Supreme Court in the case of S.A. Builders v CIT reported in 288 ITR 1 would be squarely applicable to the facts of the instant case. In the said case, the Hon'ble Apex Court held as under: "In our opinion, the decisions relating to section 37 of the Act will also be applicable to section 36(l)(iii) because in Section 37 also the expression used is "for the purpose of business". It has been consistently held in the decisions relating to section 37 that the expression "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. Thus in Atherton Vs. British Insulated and Helsby Cables Ltd. [1925] 10 TC 155, it was held by the House of Lords that in order to claim a deduction, it is enough to show that the money is expended, not necessity and grounds of commercial expediency and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case [1925] 10....
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....ears i.e. A.Y. 2002-03 and 2003-04 wherein my predecessor had held that there is no illegality in taxing the proportionate amount of capital gain on protective basis. Further, in this action, no prejudice is caused against the Assessee. Accordingly, following the decision in earlier years, this ground is dismissed. 37. Whereas it brought to the knowledge of the Bench that in the assessee's own case for the A.Y 2002-03 the wherein it has been held that capital gains on sale of RP house to be taxed over 4 years and is against the assessee. The Honble Tribunal for the A.Y 2003-04 in ITA no.4000/Mum/2007 & others dated 5-10-2021 has observed at page 42 Para 15 as under: . 15. The ground No. V was stated by the ld. AR as infructuous in view of the decision rendered by this Tribunal in assessee's own case in ITA No.3927/Mum/2006 dated 20/02/2020 for A.Y.2002-03 vide ground No.7. We find that for A.Y.2002-03, the Tribunal had held that capital gain is taxable over the period of four years in respect of capital gains arising on sale of Rhone Poulenc house property. In view of our decision taken for A.Y.2002-03 on this issue, the ground No. V raised by the assessee is hereby dis....
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.... 42. The seventh disputed issue in respect of treating rental income from let out portion of Rhone Poulenc House as Income from other sources (IFOS) instead of Income from House Property(IFHP). We found the CIT(A) has discussed and dealt at page 23 Para 11 of the order read as under: Similar ground had arisen in A.Y. 2002-03 and 2003-04 wherein my predecessor had held that income earned from RP House property is assessable as "Income form Other Sources" since ratio of the decision of the Supreme Court in case of Podar Cement was not applicable to the present case. Following the same for the year under consideration, this ground is dismissed. Further, as regard to Centre point my predecessor had held that income is chargeable under the head "Income form House property" and had directed the A.O. to grant appropriate deduction u/s 24 (a) in accordance with law. Following the same, this ground of Appeal is partly allowed. 43. We find in the assessee's own case the Honble Tribunal for A.Y.2003-04 in ITA no.4000/Mum/2007 & others dated 5-10-2021 has observed at page 45 Para 19.2 as under: 19.2. The Ld.CIT(A) upheld the action of th....