Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1676 - AT - Income TaxValuation of the stock - Held that:- Admittedly, the assessee valued the closing stock in the earlier assessment years at the cost price. During the year under consideration the assessee valued the same at market price. Due to change of the method, the Assessing Officer disallowed the diminution in the value of shares to the extent of ₹ 75.90 lakhs. This Tribunal is of the considered opinion that as rightly submitted by the assessee, the assessee has option to value the shares either at cost price or at market price, therefore, the assessee opted to value the shares at market price. Since the market price is less than the cost price, the assessee cannot be faulted with and the CIT(A) has rightly allowed the claim of the assessee. This Tribunal do not find any reason to interfere with the order of the CIT(A) and accordingly the same is confirmed. Computation of indexed cost for capital gain - Held that:- The Pune Bench of this Tribunal in the case of Kalyani Exports & Investments (P) Ltd. (2001 (1) TMI 240 - ITAT PUNE ) by majority view found that an asset cannot be acquired first as non-capital asset at one point of time and again as a capital asset at a different point of time. The Tribunal found that there can be one acquisition of asset for the first time irrespective of the character at that point of time. Therefore, by majority opinion it was found that what is relevant for the purpose of capital is the cost of acquisition and not the date at which it became the capital asset. Since by majority opinion, the Pune Bench of this Tribunal found that the cost of original acquisition has to be taken into consideration for calculating the cost inflation index and the CIT(A) has apparently followed the above order, we do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. Disallowance of 2% of the dividend income earned - Held that:- Admittedly, Rule 8D of the Income-tax Rules is not applicable for the assessment year under consideration. Therefore, the expenditure for earning the exempted income has to be estimated on a reasonable basis. The CIT(A), after taking into consideration all the circumstances and facts available on record, estimated the expenditure at 2% of the dividend income. In those circumstances, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly the same is confirmed. Disallowance of advertisement expenses - Held that:- The entire cost of publication is borne by the assessee’s client, therefore, the Assessing Officer found that there is no question of making any further payment towards publicity. The fact remains that the assessee made wide publicity by using additional pages in the magazine ‘The Integrated Share News’ which would have been otherwise used by M/s Alpha Systems Ltd for earning revenue. Since the assessee made use of the additional pages, it has to necessarily compensate M/s Alpha Systems Ltd. After wide publication, there was hike in the income of the assessee from ₹ 5,52,66,000/- to ₹ 12,18,65,000/- during the year under consideration. Therefore, as rightly found by the CIT(A), there was a nexus between the payment of advertisement charges and the business of the assessee. Hence, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.
|