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Issues involved: Appeal against common order of CIT(A) for assessment years 2003-04 and 2004-05.
Amortisation of investments under 'Head to Maturity' category: - Assessee challenged disallowance of Rs.3,13,61,004 as amortization of investments. - Claimed investments under 'Held to Maturity' category represent stock-in-trade, hence amortization is expenditure. - Referred to Bangalore Tribunal decision in own case for AY 1993-94 where similar claim allowed. Disallowance under section 14A of the Income-tax Act, 1961: - Disallowance of Rs.3,22,65,853 as estimated expenditure attributable to exempt income. - Contended all investments funded by own funds, no specific expenditure for earning income. Employees' contribution to Provident Fund: - Disallowance of Rs.6,45,560 for employees' PF contribution. - Submitted contribution made before due date for filing return, no addition required. Contingent liability relating to employees compensation expenses: - Disallowance of Rs.19,32,385 for employee compensation expenses under ESOS. - Claimed treatment as per SEBI guidelines, not contingent liability but allowable revenue expenditure. - Cited Madras Tribunal decision supporting allowance as revenue expenditure. Capital expenditure on purchase of software: - Disallowance of Rs.4,75,61,599 for software purchase treated as capital expenditure. - Argued software doesn't provide enduring benefit, should be revenue expenditure. - Referred to judicial decisions supporting treatment as revenue expenditure. Loss on acquisition of land: - Disallowance of Rs.1,05,73,978 for land portion written off. - Asserted as business loss, allowable revenue expenditure u/s 37 of the Act. Depreciation on leased assets: - Disallowance of Rs.45,11,260 as depreciation on leased assets. - Mentioned valuation report by departmental valuation officers for assessment years 1994-95 to 1997-98. Deduction under section 80M: - Reduction of Rs.6,45,800 from deduction claimed under section 80M. - Contended no actual expenditure incurred for earning dividend income, adjustment unjustified. - Cited Calcutta High Court decision on allowance of relief under section 80M. Interest under section 234D: - Levying of Rs.35,64,327 interest under section 234D of the Act. Separate Judgement: - Learned CIT passed order under section 263 disallowing certain claims while appeal was pending before CIT(A). - CIT(A) directed to pass order on merit except for grounds considered by CIT in revision order under section 263. - Appeals allowed for statistical purposes.
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