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2016 (1) TMI 447 - ITAT MUMBAIDisallowance of D-mat charges - Held that:- gone through the orders of authorities below and found that the D-mat charges were paid by the assessee to various banks. The income arising from application of share in IPO was taxed by the A.O. as business income. However, making payment to the bank for D-mat charges does not amount to any illegal payment nor such payment is in contravention of any law. Accordingly, we do not find any merit in disallowance of D-mat charges in all the three years under consideration - Decided in favour of assessee Disallowance of new issue expenses - A.O.’s action by holding that expenditure was not allowable in view of Explanation to section 37(1) - Held that:- As during the year the assessee has not written off the amount payable to M/s Viraj Investments and further more M/s Viraj Investments has also wrote letter to the assessee asking repayment of dues payable by the assessee and failing which court action was threatened by them. Under these circumstances, mere on a plea that M/s Viraj Investment written off the amount in its books of account will not empower the A.O. to add the income in assessee’s hands unless it is proved that assessee is not going to pay the amount. In the interest of justice and fair play, we restore this issue to the file of the A.O. to verify the actual payment made by the assessee in the subsequent assessment years and if it is found that the amount was not actually been paid, the A.O. is at liberty to add the same in the income of the assessee. To the extent of interest expenditure, if claimed by assessee during the year under consideration with respect to this amount, same is liable to be added. - Decided against assessee Addition made on account of transfer of 50% of IPO shares to the financiers - CIT(a) deleted the addition - Held that:- confirmation letters have been filed by the financiers before the AO with regard to the price paid by them. After considering the statement recorded by the AO as well as confirmation filed by the financiers, the CIT(A) recorded a finding to the effect that the shares were transferred by the assessee to the financiers at an issue price in accordance with the arrangement entered into between the assessee and the financiers. As the statement recorded by the AO from the financiers corroborated the stand of the assessee that the assessee had transferred 50% of shares allotted in IPO to the financiers at issue price and not at the listed price, the additions so made by the AO was not warranted. The detailed finding recorded by CIT(A) at para 7.3 to 7.6 has not been controverted by ld. DR by brining any positive material on record. Accordingly, we do not find any reason to interfere in the order of the CIT(A) for deleting the addition made on account of transfer of 50% of IPO shares to the financiers. - Decided against revenue Penalty u/s 271(1)(c) - addition u/s 41(1) - Held that:- Addition was made by the AO merely on the plea that M/s Viraj Investments to whom assessee was to make payment has written off amount in its books of account. However, at the very same time, M/s Viraj Investments has written a letter to the assessee asking for the repayment and threatened to take legal course of action in case of non-repayment. In these circumstances, it cannot be taken that assessee has earned any income u/s.41(1). The CIT(A) has deleted the penalty by observing that assessee has not concealed any particulars of income, therefore, same cannot be termed as concealment of income within the meaning of Section 271(1)(c) of the Act. The CIT(A) also observed that issue is debatable, therefore, do not warrant any penalty. Reliance was placed on the decision of Hon’ble Supreme Court in the case of Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT]. Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the penalty so imposed. Thus, the appeal of the revenue is dismissed. - Decided in favour of assessee.
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