Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (5) TMI 174 - ITAT AHMEDABADSale of mutual funds and sale of shares - speculative profit v/s capital gains - Held that:- A.O. has followed the orders for A.Y. 2002-03 and 2003-04 wherein the profit was treated as speculative profits. But CIT (A) has not given any finding with respect to the applicability of Explanation to section 73. Further the Assessee has raised an additional ground for the first time that LA erred in not granting deduction being the difference between the cost and market value of the mutual fund units held in the closing stock - the matter be remitted back to the file of CIT (A) for deciding the matter de novo & also decide the issue of profit earned on sale of shares and mutual funds in view of Explanation to Sec. 73 and for passing a speaking order to that effect. Disallowance of claim of Bad Debts as assessee has not demonstrated that the amount was written off in respective parties account- Held that:- As decided in case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] with effect from April 1, 1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable: it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee - remit the issue to the file of A.O. with a direction to him to verify the facts in the light of the decision. Disallowance of interest expenditure under Sec. 36(1)(iii) - Held that:- From the audited Balance Sheet as on 31.3.2004 as compared to immediately preceding financial year interest free funds in the form of share capital, reserves and surplus and unsecured loans as on 31.3.2004 was to the extent of ₹ 22.92 crore as against ₹ 2.79 crore as on 31.3.2003 meaning thereby that there was an increase of ₹ 20.13 crore in interest free funds. Thus it is seen that the interest free funds as on the date of Balance Sheet were far in excess of investments as on 31st Mar, 2004. Thus relying on Reliance Utilities (2009 (1) TMI 4 - HIGH COURT BOMBAY) wherein held that if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments - in favour of assessee. Disallowance of claim of depreciation on electric installation at 25% and in the process CIT(A) agree with the A.O. that it ought to be granted at 15% - Held that:- the assessee has not brought any material on record except making an oral statement statement that the electrical installations were attached to the Plant and Machinery. Further, A.R. could not controvert the finding of the CIT (A) and therefore no reason to interfere with the order of the CIT (A) - against assessee. Provisions made for leave encashment, gratuity and bad and doubtful debts - Whether be treated as unascertained liabilities, including the same in the book profit while calculating profit under sec. 115JB? - Held that:- Assessee did not argue its case before the CIT (A) and the same was dismissed as not pressed. Since the assessee has now raised the issue the matter should be remanded back to the file of CIT (A) so that the issue can be decided on merits. Disallowance towards Directors' Foreign Travel expenses and credit card and membership fees expenses - Held that:- A.O. disallowed the expenses for the reason that the assessee could not discharge the onus of proving the expenditure was for the purpose of business. Further no evidence was placed before the A.O. or before the CIT (A). Even before us Ld. A.R. has not brought any material on record in support of its contention. In view of these facts, we find no reason to interfere with the order of CIT (A). Disallowance u/s 14 A - CIT(A) deleted the addition - Held that:- While deleting the addition CIT (A) has given a finding that the assessee was having sufficient profits and interest free funds in comparison to the investments. He has further given a finding that with respect to the mutual funds transactions, no interest has been charged by the Bank except security transactions tax of ₹ 64,909/-. Before us the Ld. D.R. could not controvert the findings of CIT (A). Disallowance on account of interest expenses - Held that:- CIT (A) while granting relief to the assessee has given a finding that the availability of interest free funds and interest free unsecured loan was in excess of the investments. He has further given a finding that all the mutual funds transactions were carried out through CITI Bank and no interest was charged by the Bank except security transaction tax & deleted the addition. As D.R. could not bring any material on record to controvert the findings of the CIT (A) decided against revenue. Penalty u/s 271(1)(C) - CIT(A) deleted the levy - Held that:- CIT(A) while deleting the penalty has held that the issue on which addition has been made a debatable issue and a contentious matter and therefore, no penalty can be levied. Ld. D.R. could not controvert the findings of the CIT (A) and therefore, we find no reason to interfere with the order of CIT (A)
|