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TMI Blog2019 (6) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the circumstances the learned Assessing officer and Commissioner of Income Tax Appeal erred in : 1. In treating an amount of Rs. 2,67,00,519/- earned out of sale of investment in shares as business income and not as capital gains as returned by the assessee. The same being in the nature of capital gain be treated as capital gain and not as business income. 2. In disallowing the claim of Rs. 61,15,826/- under section 801A. This action being not in accordance with the law it is prayed that the same may be allowed. 3. Disallowing an expenditure of Rs. 23,05,985/- incurred on repairs and maintenance on the ground that it is in the nature of capital expenditure. Considering the nature of the expenditure, it is prayed that the same be allowed as revenue expenditure. The appellant named above craves to add, to alter, to amend and to modify the grounds as and when required." 3. Shri Ashok Kothary appearing on behalf of the assessee submitted that ground No. 1 of the appeal is in respect of income from sale of shares. The shares were held by the assessee as investment. Consequently, the income from sale of shares was declared as capital gains. In scrutiny assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly defended the impugned order. The ld. DR admitted that the issues raised in ground Nos. 1 and 2 of the appeal by assessee were subject matter of dispute before the Tribunal in assessment year 2006-07. The issues have been considered by the Tribunal in appeal by the assessee for assessment year 2006-07. 4.1 As regards ground No. 3 of the appeal the ld. DR submitted that the expenditure incurred by the assessee for the alleged repair of re-roofing has resulted into a new asset with enduring benefit. Further, it is assessee‟s own admission that the civil work was carried out for installation of DG set. The civil work and fabrication etc. for the installation of DG set cannot be categorized into repairs and maintenance. The ld. DR further submitted that the new compound wall was constructed by the assessee. It is not emanating from documents on record that it is a case of repair of existing compound wall. 5. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The ground No. 1 of the appeal relates to nature of income from sale of shares. The assessee company held 95,061 shares as stock-in-trade till Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n investment. The CIT(A) relied on decision of Hon'ble Supreme Court of India in the case of Sir Kikabhai Premchand (24 ITR 506)(SC) wherein it has been held that such conversion is not something not known to the commercial world and there is no legal bar on the same. 10. In our considered view in the entire framework of the Income Tax Act, there is no direct and specific embargo for conversion of stock-in-trade of shares to investment and vice versa. That over the years, Hon'ble Courts have held once such conversation has taken place, assessee should maintain that pattern. There should not be any further change in the pattern and thereby, statement of the accounts should also be maintained. In effect, there should not be any action of the assessee by which any loss arises to the Revenue. In the instant case, it is not disputed that conversion has taken place from stock-in-trade to investment and also that the Hon'ble Apex Court has observed that such conversion has no legal bar. Therefore, in view of the matter, we set aside the order of CIT(Appeals) on this issue. Accordingly, ground of appeal No.1 raised in appeal by assessee is allowed." 6. Thus, in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,985/- claimed by the assessee as repairs and maintenance. The assessee has claimed expenditure as revenue whereas the Assessing Officer and Commissioner of Income Tax (Appeals) has held the expenditure on capital account. The ld. AR has brought our attention to the findings of Commissioner of Income Tax (Appeals) in para 4.3.1 at page 17 of the impugned order. A perusal of documents on record reveal that the existing AC sheet roofing was removed and new poly-carbonate sheet roofing was fixed. The Revenue has failed to show the new asset of enduring nature that has come into existence. The scanned copy of R.A. Bill is reproduced in the impugned order. It clearly states that after removing the existing sheets new pre-coated poly-carbonate roofing sheets fixed. A perusal of documents on record show that the expenditure incurred by the assessee is purely on account of repairs. The expenditure clearly falls within the domain of "current repairs‟ within the meaning of section 30 of the Act. Another expenditure which is in dispute is repairs of compound wall. The addition has been made merely for the reason that in R.A. bill it has been mentioned "Construction of compound wall". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turned by the assessee, It is prayed that the said gain be treated and assessed as short term capital gains. 3. Confirming the order of Assessing Officer in disallowing Rs. 1,71,353/- U/s 14A of the Income Tax Act, 1961. It is prayed that the said disallowance be deleted. 4. Not entertaining the additional ground and confirming the order of the Assessing Officer in not considering the loss of Rs. 23,39,663/- arising from the wind mill business as returned. It is prayed that the said loss be allowed and the income be reduced to that extent. The appellant named above craves leave to add, to alter and to amend the grounds of appeal if and when required." 11. The ld. AR submitted that the ground No. 1 of the appeal is identical to the ground No. 1 raised in assessment year 2007-08. 11.1 In respect of ground No. 2 the ld. AR stated at the Bar that he is not pressing the same. 11.2 The ground No. 3 of the appeal is against disallowance of Rs. 1,71,353/- made u/s. 14A r.w. Rule 8D. The ld. AR contended that the assessee has received dividend to the tune of Rs. 10,48,699/-. The Assessing Officer has failed to consider the facts that own interest free funds of assessee are mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order shows that the Commissioner of Income Tax (Appeals) while upholding the findings of Assessing Officer has not given specific findings on the issue of claim of deduction. Even the Assessing Officer while passing assessment order has given cryptic findings for disallowing the loss while computing the assessee‟s claim of deduction u/s. 80IA. We are of considered view that this issue needs revisit to the file of Assessing Officer. The Assessing Officer shall decide this issue de novo after affording reasonable opportunity of hearing to the assessee, in accordance with law. Accordingly, ground No. 4 of the appeal is allowed for statistical purpose. 17. In the result, the appeal of assessee for assessment year 2008-09 is partly allowed in the terms aforesaid. ITA No. 349/PUN/2015, (A.Y. 2010-11) 18. This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-4, Pune dated 19-01-2015 for the assessment year 2010-11. The grounds raised by the assessee in appeal are as under : "On the facts and under the circumstances of the case and in law, the learned Assessing Officer and the CIT (A) erred in : 1. In disallowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 14A of the Act. 19.2 In respect of ground Nos. 5 and 6 of the appeal, the ld. AR submitted that the assessee had written off bad debts to the tune of Rs. 91,91,033/-. The Assessing Officer has disallowed the entire amount primarily on the ground that the assessee has not shown the debts as irrecoverable. The Commissioner of Income Tax (Appeals) has upheld the findings of Assessing Officer. The ld. AR contended that the bad debts were written off as they had become very old and irrecoverable. The details of bad debts written off were furnished before the lower authorities. The same were reflected in the books for the past several years. The bad debts have been written off in accordance with the principles laid down by the Hon‟ble Supreme Court of India in the case of TRF Ltd. Vs. Commissioner of Income Tax reported as 323 ITR 397. To further support his contentions the ld. AR placed reliance on the decision of Hon‟ble Bombay High Court in the case of Director of Income Tax Vs. Oman International Bank reported as 313 ITR 128. 20. On the other hand the ld. DR vehemently defended the impugned order and prayed for dismissing the appeal of assessee. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is enough if the bad debt is written off as irrecoverable in the accounts of assessee. It is not disputed by the Department that the amounts written off as bad debts were duly reflected in the books of assessee in the past and they were written off during the assessment year under appeal. Thus, in view of law laid down by the Hon‟ble Apex Court, we find merit in the contentions of assessee. The findings of Commissioner of Income Tax (Appeals) on this issue are reversed and the ground Nos. 5 and 6 of the appeal are allowed. 24. In the result, the appeal of assessee for assessment year 2010-11 is partly allowed. ITA No. 350/PUN/2015, (A.Y. 2011-12) 25. This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-4, Pune dated 23-01-2015 for the assessment year 2011-12. The grounds raised by the assessee in appeal are as under : "On the facts and under the circumstances of the case and in law, the learned Assessing Officer and the CIT (A) erred in : 1. In disallowing the claim of Rs. 28,24,212/- U/s 80IA of the Income Tax Act, 1961. This being not in accordance with the law it is prayed that the said deduction be U/s 80IA for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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