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2016 (3) TMI 548 - AT - Income TaxRevision u/s 263 - taxability of alleged long term capital gain on sale of shares - DTTA between India and the Sri Lanka. - Held that:- Gains from alienation of the shares of capital stock of the company the property of which consists directly or indirectly principally of immovable property situated in a contracting State may be taxed in that State. The situs of the shares was in Sri Lanka. The Royale Exports Ltd. is a resident of Sri Lanka, and therefore, the transfer of shares of that company held by the assessee company in India would be taxable in Sri Lanka and if gain is to be taxed in Sri Lanka, then that will not be taxed in India as per the DTAA. Thus, even after setting aside the issue to the AO, the result will be same i.e. gain will not be taxed in India. The Hon’ble Karnataka High Court in the case of D.G. Gopala Gowda (2013 (5) TMI 46 - KARNATAKA HIGH COURT) had an occasion to examine similar aspect, i.e. if after exercise of power u/s.263, no taxable income is unearthed in the hands of the assessee, then, action u/s.263 should not be upheld. In view of the above discussion, we allow the appeal of the assessee and quash the order passed by the ld. Commissioner under section 263 of the Income Tax. Revision u/s 263 - operation of weighbridge and income therefrom wrongly mentioned as per CIT(A) - as per CIT(A) expenditure is in higher side as compared to income from the operation of weigh-bridge - Held that:- The assessee has placed on record computation of income, details of expenditure and all other details called for by the AO. The assessee has an income of ₹ 906/- under the head “Business Income”. This income was earned by the assessee from renting of weigh-bridge. In our opinion, the ld.Commissioner was of the view that against an income of ₹ 906/- from the operation of weigh-bridge, the expenditure of ₹ 2,98,212/- towards salary and ₹ 1,16,067/- towards depreciation of weigh-bridge are prima facie on the higher side and this aspect has been accepted by the AO without verification. In our opinion, the assessee has placed on record the details. If the logic of the ld.Commissioner is accepted that against a miniscule income, expenses of more than ₹ 4,16,000/- has been claimed by the assessee, then no assessee would ever suffer loss. Certain expenditure are to be given to the assessee, even if in a particular year no business activity was carried out. The assessee has shown operation of weighbridge and income therefrom. Therefore, the ld.Commissioner is not justified in taking action under section 263 of the Income Tax Act. We allow this appeal of the assessee also and quash the order passed by the ld. Commissoner. - Decided in favour of assessee
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