Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 967 - AT - Income TaxAddition on account of underwriting charges - allowable business expenditure - As per AO underwriting commission incurred by the assessee is not related to the business of the assessee in its normal course -CIT(A) had granted relief to the assessee by following the order of his predecessor for the very same issue in A.Y.2015-16 - HELD THAT:- There is neither any factual change nor any legal change with regard to the facts prevailing in A.Y.2015-16 and the facts prevailing during the year under consideration. It is pertinent to note that against the order passed by the predecessor the ld. CIT(A) for A.Y.2015-16, no appeal has been preferred by the Revenue before this Tribunal. Hence, that order of the ld. CIT(A) had attained finality. Addition u/s.68 - unexplained gifts received - assessee was asked to explain and furnish the occasion for which the gift was received creditworthiness of the donor, bank statement of the donor etc. - HELD THAT:- AO in the remand report had agreed that the creditworthiness of the donor is established in addition to identity and genuineness of the transaction. CIT(A) had categorically stated that there is nothing on record brought by the ld. AO to show that the transaction of gifts are of doubtful nature. In any case, this is nothing but gift received by the assessee from his own brother which would be exempt u/s.56(2) of the Act. On this count also no addition could be made in the hands of the assessee in respect of the gift. It is also a fact on record that gift has been duly confirmed by the brother that the money is payable to him by the proprietary concern is being converted into gift out of natural love and affection. When the provisions of Section 68 of the Act per se could not be made applicable, as no receipt of money was available during the year under consideration and in view of the fact that gift has been received only from assessee‟s own blood brother (which would be exempt from tax), the decision relied upon by the Revenue on case of CIT vs.Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] and Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] does not come to the rescue of the Revenue. The gift confirmation also says that the same is irrevocable. In view of these documents which remained uncontroverted before us and in view of the aforesaid observations, we have no hesitation in confirming the order of the ld. CIT(A) granting relief to the assessee in this regard. Accordingly, the ground No. (ii) raised by the Revenue is dismissed. Addition on account of advance received towards sale of shares - shares in FCPL were held in the form of investments of the assessee and not as “stock in trade" - HELD THAT:- We find that the Revenue had sought to apply provisions of Section 51 of the Act to treat the said advance as monies forfeited and thereby liable to tax in the hands of the assessee. In this regard, we find that this aspect has already been addressed by the ld.CIT(A) in para 11.2 of his order, wherein, it was held that there is no provision to treat the forfeited amount as income of the assessee and that even the amendment brought in by the Finance Act (No.2), 2014 effective from 01/04/2015 in Section 51 by way of insertion of proviso which is prospective in nature provided that the forfeited amount shall be deemed of income of the year in which forfeiture has been made. The shares of FCPL, as stated earlier is continued to be shown as investment in the balance sheet of the assessee and the same were not transferred at all. Hence, by no stretch of imagination, this advance receipt could be brought to tax under any provisions of the Act applicable to the year under consideration, Hence, we find no infirmity in the order of the ld. CIT(A) granting relief to the assessee in this regard. - Decided against revenue.
|