Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 1686 - AT - Income TaxAddition on accrued interest on Inter Corporate Deposits (ICDs) - accrual of income - Held that:- CIT(A) after appreciating the facts of the present case has rightly concluded that although the assessee has earned dividend income @ 5% on the debentures, but the assessee has not offered the interest income on the ground that the concerned party has requested to waive the interest. From the records, we also noticed, that though the assessee has not waived interest, as there is no such board’s resolution, but the assessee has preferred not to charge interest in the books of account. As per the assessee no interest income has accrued, therefore the interest income has not been shown. We also noticed that the money lent as debentures have become NPA (Non-performing Asset), an aspect which has not been challenged by the revenue before us. Therefore as per AS-9, no interest is to be charged on such an investment. - Decided against revenue Disallowance of legal and professional fees - revenue or capital expenditure - Held that:- CIT(A) after appreciating the facts of the present case has rightly concluded that the assessee has incurred legal and professional charges in connection with the business of assessee. The assessee incurred total expenses of ₹ 31,75,043/- being the amount of legal expenses and other expenditure like labor matters, the assessee has incurred an amount of ₹ 3,06,536 and retainership fees and others amounting to ₹ 10,21,849/- as expenses in connection with business of the assessee. The said expenses have also been allowed by the AO in the earlier years in assessment u/s 143(3) - Decided against revenue. Treating the profit on sale of shares - as Capital gain OR business income - intention of the assessee to earn business profits - Held that:- CIT(A) after appreciating the facts of the present case has rightly concluded that the assessee has been showing investment in the balance sheet as investments only. We have also noticed that the assessee has not treated the shares as stock-in-trade, hence the intention of the assessee is to earn capital gain on sale of shares. From the facts of the case, the assessee has not used any borrowed funds for the purpose of purchasing the shares - consistency has to be maintained in Income tax proceedings if in earlier years, the claim of the assessee was accepted as capital gain, the same cannot be changed in this year on the same set of facts and circumstances of the case. Disallowance u/s 14A read with rule 8D - expenses were incurred for earning tax-free income - Held that:- Remit the matter back to the file of AO for passing afresh order to apply provision of section 14A r.w. rule 8D of I.T. Act only in relation to the income which does not form a part of the total income under the Act. It is needless here to mention that before passing the order of assessment, the AO shall provide sufficient opportunity of hearing to the assessee.
|