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2021 (7) TMI 15 - AT - Income TaxBogus LTCG on share application money received - Addition u/s 68 - correct assessment year - HELD THAT:- A perusal of the facts of the case reveals that the amount was received during the AY 2011-12. During the year under consideration, the share application money received in the previous year was transferred to the share capital a/c and share premium a/c. Therefore, the amount cannot be added in the 2012- 13. Moreover, it is also supported by the documents on record. In the circumstances, the addition cannot be made during this assessment year but should have been examined in the previous year. It is also pertinent to note that all details relating to the source of funds have been submitted by the assessee. In view of the above, delete the said addition. This ground of appeal is allowed. Expenditure of staff salary, payment of rental, professional expenses etc - Disallowance on the ground that these expenses are liable to be capitalized u/s 57(iii) - HELD THAT:- No doubt, there was no order received by the assessee from customer creating lull in the business but assessee remained into manufacturing activities during the year under assessment. In these circumstances necessary expenditure of staff salary, payment of rental, professional expenses etc. are required to be incurred to keep the business alive. Their machines remained in operative posture. CIT(A) has rightly and legally deleted the addition by following the decision rendered in the case of CIT vs. Nahar Exports Ltd. [2007 (5) TMI 171 - PUNJAB AND HARYANA HIGH COURT] has allowed and in the case of CIT vs. Chennai Petroleum Corporation [2013 (8) TMI 525 - MADRAS HIGH COURT] wherein it has been held that “machinery could not be put to use due to raw material paucity, assessee’s claim for depreciation could not be rejected. Consequently Ground No. 2 is also determined against revenue.
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