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2020 (3) TMI 389 - AT - Income TaxDisallowance of share issue expenses u/s 35D(2) - assessee has not established the business - HELD THAT:- We observe that the Ld. CIT(A) has passed a very reasoned order by holding that there was expansion of the existing unit. During the course of hearing also we required the Ld. A.R. of the assessee to produce the necessary documents which were filed before us and after examination of the same we are of the view that assessee has expanded the existing unit in order to carry out its operation more economically and accordingly we are inclined to uphold the order of Ld. CIT(A) by dismissing the ground No.1 & 2 of the issue raised by the Revenue. Claim of bad debts - sale of property as long term capital loss to be carried forward to the next year - no such claim was made either in the return of income or in the assessment proceedings and therefore not allowable - HELD THAT:- CIT(A) has rightly entertained the claim of the assessee and allowed the long term capital loss to be carried forward to the subsequent years. The Revenue has relied on the decision of Hon’ble Supreme Court in the case of Goetz India Ltd. vs. CIT [2006 (3) TMI 75 - SUPREME COURT] however in the case of “CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd.” [2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that appellate authorities can entertain a claim of the assessee which is not made in the return of income after considering the decision of Hon’ble Supreme Court in the case of Goetz India Ltd. vs. CIT (supra). Loss has genuinely arisen due to fall in prices of property during the period when preemptive right by member of Lalbaug Industrial Estate Ltd. was excercised. Needless to mention that assessee has already returned the gain on this property resulting from the transfer of the property through MOU and part handing over the possession to the prospective buyer and thus are recognised the the transaction of sale in the books of accounts. In our opinion, this is a genuine short fall in recovery of the sale consideration originally agreed to and recognized in the books of accounts by the assessee. Therefore, the action of Ld. CIT(A) in allowing the carried forward of the said loss is as per the provisions of Income Tax Act. Accordingly, we do not find any infirmity in the order of Ld. CIT(A) and same is upheld by dismissing the ground raised by the revenue. Addition u/s 14A read with rule 8D2(iii) - HELD THAT:- CIT(A) has given a correct finding on the issue that no disallowance is required to be made under rule 8D2(iii) where no satisfaction has been recorded having regard to the books of accounts of the assessee as to how the claim of the assessee that no expenses are to be disallowed is wrong. We note that in point No.17(1) of 3CD report the assessee has worked out the expenses at nil. Accordingly, we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the Revenue. Bogus purchases - HELD THAT:- We observe that in this case the assessee is engaged in the business of printing and publication of newspaper and other publications. The assessee has turnover of ₹ 500 crores during the year. We observe that the disallowance made by the AO on account of bogus purchases is only ₹ 38,563/- despite the fact that the assessee has produced all the necessary bills, vouchers, transport receipts, inward and outward stock entries along with the payment through banking channel. The AO has not carried out any enquiry despite assessee filing all these informations before the AO. Moreover this being a petty expense which having regard to the turnover of the assessee is not even worth consideration. In our view, the Ld. CIT(A) has taken a balanced and correct view of the matter. After considering all the facts and circumstances of the case, we are inclined to uphold the order of Ld. CIT(A) on this issue by dismissing the appeal of the Revenue.
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