Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (7) TMI 31 - ITAT AHMEDABADCapital gain on sale of 330 Deep Discount Bonds series - Long term v/s short term - claim of deduction u/s.54EC - Held that:- As the period of holding has to be counted form the date of allotment in the present case when we count the period of holding from the date of allotment, the same is more than 12 months and, therefore, the resultant capital gain is taxable as LTCG and consequently, the assessee is entitled to the deduction u/s 54EC. In favour of assessee. Salary paid to the employee as company secretary disallowed - Held that:- This is an admitted position that as per the requirement of the Company's Act, any company having paid up capital of ₹ 25 lacs or more is compulsorily required to employ a qualified CS and, therefore, this cannot be said that the salary paid to the CS employed by the assessee to fulfill the requirement of the Companies Act is an expenditure to earn exempt income and, therefore, to be disallowed u/s 14A of the Income tax Act, 1961. In favour of assessee. Disallowance u/s 14A - Held that:- This interest expenditure was incurred mainly on the borrowings for repayment of loan which was availed for investment in DDBs of Nirma Ltd. Series A and, therefore, interest expenditure was incurred wholly and exclusively for the purpose of earning such income which is taxable and hence, rightly claimed. As neither CIT(A) nor D.R. could establish that this contention of the assessee is not factually correct disallowance deleted. In favour of assessee. Notional accrued interest on optionally fully convertible premium notes (OFCPNs) - Additions to income - Held that:- It is not the case of the A.O. that the assessee has sold or transferred these OFCPNs in the present year, thus in the absence of this, it cannot be said that any income has accrued to the assessee even if it is accepted that the market value of these OFCPNs till the last date of the present year is more than cost price i.e. issue price which can be issue price + proportionate accretion and the difference between the face value and issue price. As the nature of OFCPN is not that of FD and it is also not of the nature of DDB because of convertibility option and uncertainty about receipt of any extra amount over and above the issue price. Even on conversion, shares are to be allotted at par and not at a premium i.e. face value, thus it cannot be said that any income has accrued to he assessee on account of these OFCPNs of Nirma Industries Ltd. because no sale has taken place and there is no guaranteed income to the assessee even after five years in case the assessee opts for conversion into shares at par. Hence, this ground of the assessee is allowed. Disallowance on account of advances written off as the assessee is not engaged in the business of money lending - Held that:- Failure to understand when the A.O. himself is stating that the assessee has advanced an amount of ₹ 4 crores as deposit, how it can be said that the assessee is not engaged in the business of financing and money lending. The assessee has made available a copy of the certificate issued by RBI which is dated 20.03.1998 and as per this certificate, the assessee has been registered as NBFC Company. Thus no merit in the disallowance made by the A.O. In favour of assessee Interest u/s 234D - Held that:- This issue is now covered in favour of the assessee by the decision of Ekta Promoters [2008 (7) TMI 452 - ITAT DELHI-E].
|