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TMI Blog2010 (3) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... order. I. T. A. No. 1610/Mds/09 M/s. Shriram Transport Finance Co. Ltd. assessment year 2005-06 : 2. This appeal is directed against the order of the learned Commissioner of Income-tax (Appeals) dated December 24, 2008. The assessee, in this case, is engaged in the business of hire-purchase, financing and leasing of commercial vehicles. The assessee-company filed its return of income for the assessment year 2005-06 on October 29, 2005 admitting an income of Rs. 34,25,13,310 under normal computation and has adjusted a book profit of Rs. 67,86,89,000 under section 115JB of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short). 3. The first issue of this appeal is regarding additional finance charges in respect of hire p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,09,93,553 on account of sale of shares of Shripet Cybertech Ltd. (formerly known as Shripet Polymer Ltd.). The shares were acquired at the rate of Rs. 10 per share and were sold at the rate of Re. 1 per share. The sale has been, admittedly, effected to a sister concern. The Assessing Officer was not convinced, specifically he could not accept the rate of Re. 1 per share holding it as baseless. But, the learned Commissioner of Income-tax (Appeals) has agreed with the assessee and has accepted its contention that Shripet Cybertech had been incurring continuous losses and its shares held by the assessee-company, had to be divested in accordance with RBI directions to the effect that unrelated activities as business of NBFCs were to be disco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquor was what was charged by the appellant under its bill together with the excise duty which the buyer had directly paid on seller's account. The consideration for the sale was thus the total amount and not what was reflected in the bill. Excise duty, though paid by the purchaser to meet the liability of the appellant, was part of the consideration for sale and was includible in the turnover of the appellant." 6. If there is a series of transactions between such parties, the decision of McDowell & Co. Ltd. (supra) would not apply. In this regard, the decision of the hon'ble Supreme Court in the case of Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706/132 Taxman 373 will apply in which case similar view has been taken. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision : "37. The Assessing Officer did not accept the assessee's plea, in the course of assessment proceedings, that book profits were required to be reduced by the quantum of the statutory reserve created as per the Reserve Bank of India guidelines amounting to Rs. 10 crores from the book profits as per the profit and loss account. The non-acceptance of the assessee's plea would be warranted in terms of Explanation 1 to section 115JB which permits increasing of book profits by amounts carried to any reserves, by whatever name called. Thus, in principle, the action of the Assessing Officer is supported by the provisions of Explanation 1 to section 115JB of the Income-tax Act. The claim of the assessee, in the course of the present appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2005-06) : 15. The grounds raised in this appeal of the Revenue read as under : "1. The order of the learned Commissioner of Income-tax (Appeals) is contrary to law and facts of the case. 2.1. The learned Commissioner of Income-tax (Appeals) erred in holding that computation of income with reference to accounts prepared for the purpose of income-tax was proper and, thereby, deleting the addition of Rs. 1.04 crores made towards additional finance charges on accrual basis, relying upon the hon'ble jurisdictional Tribunal's decision in the assessee's group of cases dated April 21, 2006. 2.2. It is submitted that the decision relied upon by the learned Commissioner of Income-tax (Appeals) in deciding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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