TaxTMI 
TaxTMI 
2025 (3) TMI 1905
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.... The learned CIT (Appeals) has erred in law and on the facts of the case in not reducing the profit on sale of shares from the book profit u/s. 115JB in relation to the shares of 2 subsidiary companies namely Rolta UK and Rolta Middle East FZLLC since the shares were not transferred during the year." 2. The assessee is a company engaged in the business of software engineering and development. The assessee filed the return of income for AY 2015-16 on 28/11/2015 declaring the total loss of Rs. 88,25,83,242. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer (AO) completed the assessment by making various disallowances to arrive at the assessed income of Rs. 29,00,61,903. The AO set off the brought forward losses from earlier years to the extent of assessed income to arrive at the total income of nil. The AO also recomputed the book profits under section 115JB at Rs. 418,61,51,508. Aggrieved, the assessee filed further appeal before the CIT appeals who gave partial relief to the assessee. The assessee is in appeal before the tribunal against the order of the CIT appeals. 3. There was a considerable delay in filing....
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....tices were served but no reply was received. 5,07,79,828 - 5,07,79,828 C. Purchases where notice has not served 1,84,42,516 - 1,84,42,516 Total 26,46,14,976 12,23,26,475 13,97,06,241 5. The CIT(A) confirmed the disallowance on the ground that the assessee failed to prove the genuineness of the purchases and assessee failed to reconcile the difference in the purchases deducted during remand proceeding. During the appellate proceedings the CIT(A) noticed that the AO has made the addition on the net difference between the assessee's purchases and the amount confirmed by the suppliers which included cases where the purchases as per assessee's books were more. Accordingly, the CIT(A) proposed an enhancement of Rs. 2,95,50,708/- towards the excess purchases which have been reduced from the shortage in purchases declared by the assessee. The assessee agreed to the disallowance and accordingly the CIT(A) enhanced the disallowance made by the AO. 6. The ld. AR submitted that the assessee being in the business of software development has to constantly upgrade its hardware required for the development of software. The ld. AR further ....
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....he assessee. It is also relevant to notice here that the purchases pertain to the hardware which is claimed to be used for the purpose of the business of the assessee namely development of software and that the AO has not disturbed the P&L A/c of the assessee and has merely made addition towards the un-reconcile balance. In our considered view the AO is not correct in making the addition merely based on 3rd party confirmation without taking into consideration the reasons given by the assessee for the difference and without making further enquiries based on the details submitted by the assessee with regard to the 3rd parties. Therefore, we hold that the addition made towards un-reconciled balances including the enhancement made by the CIT(A) is not sustainable and accordingly deleted. 9. With regard to addition made towards purchases where the vendors have not responded we notice that the AO in the remand report has stated that confirmations from few of the parties are received post completion of assessment. We are also of the view that addition cannot be made merely for the reason that the parties have not responded to the notice, without considering the other details furnished ....
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....decision of the Hon'ble Supreme Court in the case of Goetz (India) Ltd. vs CIT (2006) 284 ITR 323 (SC) 12. We heard the parties and perused the material on record. During the course of hearing the ld. AR took the bench through the relevant documents with regard to the inadvertent error committed by the assessee by not claiming 200% of the Capital Expenditure incurred towards Scientific Research. The ld. AR also submitted that the amount which the assessee is eligible for claiming deduction under section 35(2AB) is as per the certificate in Form-3CL issued by DSIR. From the perusal of the evidences, we see merit in the submission that the assessee has made an error by claiming 100% of the capital expenditure instead of 200% while filing the return of income. It is relevant to mention here that the claim for the additional 100% is not a fresh claim, and therefore we are of the view that the CIT(A) is not correct in rejecting the claim of the assessee. Accordingly, we direct the AO to allow the differential amount towards Capital Expenditure as deduction which the assessee is eligible to claim as per the provisions of section 35(2AB) after verifying the relevant documents in th....
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....sion for post facto transaction such as cancellation that too after four years from the completion of the assessment, since such income is already shown in the book Profit of the concern year and prepared as per AS & companies Act and duly audited and the Book Profit cannot be changed unless rectified by the following proper legal recourse under companies Act. 7.13 The appellant has not explained in his submission as to why approval was not sought or any reason for delay from the regulatory authority before the transfer of the shares of the subsidiary which were booked in account as profit in P&L account and claimed as capital loss in normal account. 7.14 It is important to note that the Appellant has given a quid pro quo offer that if the same is reduced from Book Profit, then it will reverse the claim of Capital loss in normal computation, this stand of the appellant clarifies the non-genuinity of transaction & claim. 7.15 The appellant being listed company have booked such a high Profit on sale of Shares and whether Dividend is declared from such profit booking, while for taxation claiming that the said is cancelled and even though if it was cancelled ....