Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 392 - AT - Income TaxCompensation received for surrender of tenancy rights - taxed u/s 45 as capital gain or “Income from other sources.” - Held that:- The assessee has received the said payment from a third party. The terms of the agreement clearly shows that the assessee has given up its right of tenancy in favor of the third party by accepting a certain sum of money. The possession of the premises has been parted away and the transaction is being recognized by the landlord. Hence, the assessee has surrendered the tenancy rights against certain sum of money, no matter whether the payment is directly paid by the landlord or paid by a third party on behalf of the landlord. Such tenancy rights in the building are capital asset as per the definition of Capital asset u/s 2(14) and hence rightly found taxable under the head Capital Gains by the learned CIT(A). The cost of acquisition of the same has been correctly taken as Nil as per Section 55(2)(a)(ii). We, therefore, do not find any infirmity in the order of the Ld. CIT(A) on this issue. - Decided against revenue Disallowance in respect of VRS expenditure - CIT(A) allowed the claim - Held that:- Though, the assessee had debited only a portion of the said expenditure in the books of account yet, claimed the same in full in computation sheet. As held by the Hon’ble Supreme Court in the case of Taparia Tools [2015 (3) TMI 853 - SUPREME COURT ] that such course of action is permissible under law as the assessee has claimed the expenditure in the year in which these were incurred, hence, respectfully following the above judicial pronouncements, we affirm the view of the CIT(A) in this regard. - Decided against revenue Claim of depreciation allowance - Held that:- Issue is already settled in favor of the assessee Disallowance of expenses on account of amortized lease hold land premium - Held that:- The deduction of these expenses has been allowed to assessee is earlier years. The assessee has not become owner of the property in question. - Decided in favor of the assessee Disallowance of travelling expenses - Held that:- The inadmissible expenditure was quantified by the tax auditor and complete details of these expenses were already available with the AO. The details of expenses formed part of Audit Report. The action of the AO in disallowing the said expenditure on assumptions and estimate basis is not justifiable. Hence, we are of the opinion that CIT(A) has rightly deleted the same. - Decided in favor of the assessee Claim of prior period expenses - Held that:- Similar issue has arisen in the case of the assessee for Assessment Year 1988-89 and the same has been decided in favor of assessee on the ground that although the expenses related with prior period but they became crystallized and ascertained only during the relevant assessment years and hence allowable.- Decided in favor of the assessee Deduction of Technical fees paid by the assessee u/s 35AB - Held that:- The expenses incurred by the assessee are in the nature of payments made to avail technology support for production, planning, quality control and related products. These expenses are incurred only with a view to enlarge the profit making apparatus of the business and therefore, revenue in nature. Hence, the aforesaid expenditure being revenue in nature are allowed in full as per various judicial pronouncements as cited above. The same are allowable in full being revenue in nature and hence, the appeal is decided in favour of the assessee. Disallowance u/s 43B in respect of Sales Tax - Held that:- An amount was claimed by the assessee which remain unpaid by the stipulated date and accordingly, added to the income of the assessee by AO by invoking Section 43B which was affirmed by the CIT(A). During submissions, AR, in the alternative, prayed before us, to issue directions to AO to allow the same in the year of payment. The DR had no objection against the same. Accordingly, AO is directed to allow the same in the year of payment as per the request of the assessee. Disallowance of Guest House Expenditure - Held that:- AR submitted that the identical issue has been restored to the file of AO for fresh adjudication in assessee’s own case for different assessment year ie. AY 1989- 90 to 1994-95 vide different decisions of the Tribunal. The assessee has placed on the file the copies of the orders of the Tribunal in this respect. He, therefore has requested that on the same lines, the issue may be resorted back to the file of AO for fresh adjudication. The DR had no objection to the same. Disallowance of entertainment expenditure - Held that:- Following the rule of consistency, 25% of the expenditure is allowed as deduction in computation of Income as allowed in earlier years. Disallowance of loss on damaged uninstalled machinery - Held that:- The AO’s order clearly spells out the fact that insurance claim has been received against the said damage and the machinery was awaiting installation. In such a scenario, the assessee’s right in the assets has been extinguishment in the favour of the insurance company and since the machinery is uninstalled, the same has not entered the block of assets eligible for claiming depreciation. It is nothing but asset of the assessee awaiting to be entered in the block of assets. Hence, the loss arising there form has been rightly claimed under the head capital gains. Disallowance of expenditure in respect of gifts - Held that:- As AR contended that that this amount has already been disallowed suo-moto by the assessee while computing taxable income for the relevant assessment year. Separate disallowance by AO would amount to double disallowance. Hence, the matter is restored back to the file of AO for verification of the claim of assessee in this regard and if found correct, the AO to give relief to the assessee accordingly.
|