9911796707
TMI Blog2012 (7) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... i Woronzow (in short Mrs. Woronzow), the sister of the deceased. She was also appointed as executrix of the Will and was also the beneficiary of EFD estate. She was also made as a residuary legatee of EFD. Thereafter Mrs. Woronzow obtained a probate of the Will and appointed Mr. Jahangir Behram Dubash (in short Mr. JBD) as an administrator of the estate of the deceased EFD and his appointment was confirmed by the Hon'ble Bombay High Court and accordingly letters of administration were issued on 12-11-1971. As per the Will, the income of the Estate of EFD was to be paid to his sister Mrs. Woronzow during her lifetime and after her death, the corpus including immovable properties should be paid to two American charitable organisations. Mr. JBD later on requested to be released as an administrator of the estate. In his place Mr. Nusli Neville Wadia (in short Mr. Wadia) was appointed as the administrator and his appointment was also confirmed by the Hon'ble Bombay High Court on 21-12-1972. Thus, all the properties of the estate vested him as an administrator. He continues to act as an administrator. Mr. Wadia as an administrator of the estate entered into an agreement dated 2-1-1995 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bequest made by EFD to the two American charitable organisations was invalid in view of Section 118 of the Indian Succession Act, 1925. The Court also affirmed the position of Mrs. Woronzow being the residuary legatee and was entitled to the proceeds of realisation of the immovable property forming part of the Estate. 2.2 In the meantime on 17-10-2001 Mrs. Woronzow also executed her Will, wherein Mr. Wadia was appointed as the sole administrator and through her Will she bequeathed all her movable properties to Miss Rutly CP Wadia and Miss Marry CP Wadia and all her rights and titles in the immovable properties including the share in the jointly owned properties of her late brother Mr. EFD, she bequeathed the same to Mr. N. Wadia and Mr. J.N. Wadia, sons of Mr. Nusli Wadia. On 12-8-2003, Mrs. Woronzow also expired. On her death Mr. Wadia filed an application before the Hon'ble High Court seeking approval for his continuance as an administrator of the Estate of EFD. The Court vide order dated 20-11-2003 permitted Mr. Wadia to continue and act as an administrator of the Estate. In the capacity as an administrator of the Estate, he received money from the sale/disposal of the immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the ITAT and the Hon'ble ITAT has considered each and every aspect taking into consideration and arguments of both the parties and the reasoning given by the Assessing Officer as well as the CIT(A), which is applicable for all these appeals. He, therefore, strongly relied upon the finding of the Tribunal in the case of Nusli Neville Wadia (Supra). 7. We have heard the rival contention of the parties and also perused the material on record and the findings given by the ITAT. It is noted that the reasoning given by the Assessing Officer is exactly the same as was given in the case of Nusli Neville Wadia (Supra), which has been dealt with extensively by the Tribunal along with counter arguments from both the sides which are running from paragraphs 12 to 39 of the order. The entire findings after considering the entire gamut of arguments and the findings of the CIT(A) and Assessing Officer are reproduced herein below for the sake of ready reference and appreciation :- Thus, in this background revenue has raised two disputes, [i] that the ld. CIT(A) erred in holding that receipt of Rs.71.63 crores on transfer of land is not taxable and [ii] the assessee is not the residuar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. Mr. Nusli N. Wadia was appointed as an Administrator in place of Mr. Jehangir Behram Dubash who had shown his inability to continue as Administrator by the order of the High Court dated 21-12-1972. Therefore, the properties were vested in the administrator i.e. Mr. Nusli N. Wadia in his capacity as 'Administrator'. The Administrator was required to pay income of the properties to BW but before doing that assessee under the law i.e. sec.168 of the I.T.Act was required to pay taxes on behalf of the estate. Even after the death of BW assessee made an application before the Hon'ble High Court for continuing as Administrator. A copy of the order of the High Court is available at pages 79 to 96 of the paper book. The reasons for continuance of Mr. Nusli N. Wadia as an Administrator have been given at para-16 of the petition which are as under: x x x x x Thus, from the above, it is clear that there were various reasons for the continuance for the existence of the estate, particularly, the reason that a sum of Rs.10 crores was reserved for charity. In fact, the fact that the sum of Rs.10 crores was required to be paid to charity was made clear even in the indenture dated 26-9-2001 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, we are of the view, that even second part of the first ground raised by the Revenue is not maintainable and, therefore, we reject ground No.1 of the appeal of the Revenue. 41. Ground No.2 raised by the Revenue is as under: "The learned CIT(A) ought to have treated the receipts either as short term capital gain or adventure in the nature of trade." 42. For deciding this ground let us recapitulate the facts again which would clearly show the nature of receipts. The receipt of sum of Rs.71.63 crores consisted of following: 1. Payments made Rs.27,13,36,000/- 2. 7% Government of India Bonds-2003 Rs.36,00,00,000/- 3. 6.5% Government of India Bonds-2003 Rs. 8,50,00,000/- EFD who was resident of U.S. was the owner of various immovable properties in India. He executed a will in 1970 through which a trust was created and BW was appointed as sole executrix. BW was the sister of EFD and was also made sole beneficiary of the incomes of the trust properties. On the death of BW the properties were to go to two American Charities as per the will. Since BW was living in USA she appointed Mr. Jehangir B. Dubash as Administrator of the properties, however, he showed a reluctance to continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay taxes and only thereafter any distribution could have been made in favour of the beneficiary of the will. Therefore, once the taxes are paid by the estate, naturally, the beneficiary receiving any distribution of such sale receipts could not have been taxed again by the revenue. 43. During the course of hearing, Ld. Sr. Advocate of the assessee further pointed out that out of the total sum of Rs.27,13,36,000/- by bank transfers, only a sum of Rs.13.47 crores was distributed by the Administrator out of the income which was accumulated over the period of years by the estate of EFD. He had also argued that once the estate had suffered the tax, then the same amount could not be taxed again in the hands of the transferees. We find merit in this argument that same item of income cannot be taxed twice because this receipt could not have been treated as taxable item in the hands of BW. Merely because assessee has entered into an indenture dated 26-9-2001 by which assessee became entitled to receipt of distribution of sale proceeds from the Administrator in place of BW, would not change the basic principal that no item of income can be taxed twice. In fact, same view has been taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the taxable income." After this observation, the income was finally computed as under: Total receipts on account of Rs.11,93,88,000 sale of properties Less: Cost attributable to assessee's share as discussed Rs. 19,000 Less: Portion of capital gains which had Rs. 1,37,00,000 already been subject to capital gains tax in the hands of the estate --------------------- Short Term Capital Gains Rs.10,56,78,000 =========== Thus, from the above, it is clear that sale receipt against which conveyance deed was already executed and which were assessed in the hands of estate of EFD, were not subjected to tax again. 44. Now let us examine the other portion of the receipts. It was pointed out that in the case of the assessee also out of the total receipts of Rs.71.63 crores, a sum of Rs.63.5 crores distributed by the Administrator was out of the advances received from the purchasers and developers. Such advances were paid by the prospective customers against the purchases. It is not denied by the Revenue that these amounts represented advances because as and when same were converted into sale, same were offered to tax in the hands of estate of EFD. Now, if the receipts on which ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ributed personal estate of the deceased or the income from the undistributed share of the interest of the deceased in the HUF." Thus, it is clear from the above that whenever an estate is in existence, which in the case before us is definitely there, then taxes on the income of the estate are required to be paid only by the executor which would include administrator also and in the case before us the Administrator had already filed income tax returns which had assessed also, which means, Revenue has accepted that income arising from the estate belonged to the estate. In these circumstances, advances received by the estate cannot be treated as income unless the same have been converted into the sale proceeds by execution of the conveyance deed. In fact, such advances have been treated as liabilities and whenever sales have been affected, they have been transferred to the sales account and offered for tax accordingly by the estate. Therefore, such advances if cannot be treated as income in the hands of the estate, then in turn, the same cannot be treated as income in the hands of the beneficiary, particularly because the liability of the estate existed to pay the taxes whenever such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act, 1925 therefore, by investing a small sum assessee could make a big fortune if ultimately the bequeathal to the two American Charities was held to be invalid. The Ld. Sr. Standing Counsel has also laid lot of stress on this fact and pointed out that assessee would not have received anything but for the indenture dated 26-9-2001 entered into by the assessee with BW. He had also laid emphasis on the fact that the indenture was subject to the order of the Bombay High Court wherein bequeathal of the properties to two American Charities was challenged and, therefore, this clearly shows that assessee had protected himself by making the indenture subject to the out come of the order of the High Court. Thus, by taking practically no risk assessee had invested the total sum of Rs.20 lacs along with four associate companies and has obtained 60% rights for receiving the sale proceeds from the immovable properties for his personal consideration of Rs.12 lacs. But after examining all the facts, we are of the opinion that facts do not support the case of revenue. It cannot be said that the assessee had entered into transactions which can be called as adventure in the nature of trade. Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o receive sale consideration was to commence as per the indenture dated 26-9-2001 only after the death of BW. These facts do not indicate any commercial relationship. 49. In any case, the issue also stands covered by the decision of the Hon'ble Madras High Court in the case of Mothay Ganga Raju vs. CIT [supra]. In that case assessee was a land owner and money lender and also had interest in certain cotton mills. The assessee purchased on 22-3-1926 right, title and interest of one Shri Parthasarthy Appa Rao in the legacy left by one Shri Venkayamma through the court auction. The purchase price was Rs.39,800/-. There was some protracted litigations between the date of purchase and the date of realisation of money along with the purchase cost the total expenditure came to Rs.46625-15-0. The assessee ultimately realised a sum of Rs.1,97,025/- from the reversions of the estate in question towards the amount due to him under the decree. Thus, assessee realised a surplus of Rs.1,50,399/-. The ITO held this excess receipt as assessable to income tax and the matter traveled upto the Hon'ble High Court. The Hon'ble High Court observed as under: "In our view, this cannot be described as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aser from him was likely to require such a quantity for his private use." The view we take of the matter is that that case is certainly of no assistance to us, and that, with regard to this case, this was an isolated transaction in no way connected with any other trade or business activities of the assessee. That being so, we are unable to hold that it was an adventure in the nature of trade and, if that is so, then the sum in question was not clearly assessable to income-tax." In the case before us also assessee is an industrialist but his main source of income is only salary. He is not doing any business directly. In no other case he has entered into any other transaction of purchasing residuary legacy. Therefore, in view of the above decision, the transaction entered into by the assessee for purchasing the right to receive the sale proceeds cannot be construed as a transaction which can be called an adventure in the nature of trade. Here we would like to mention that sometimes if facts so warrant even a single transaction can constitute the business transaction which may be called an adventure in the nature of trade but then same must have some commercial features. As po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact has been accepted by the Revenue by assessing the estate in the hands of the Administrator because income tax as well as wealth tax returns have been accepted by the revenue. In fact, assessee's right was restricted only for receiving of sale proceeds from the properties. Since assessee was not owner of the properties, there is no question of transferring any rights in such properties. Further, the administrator could not distribute the proceeds from sale of the properties unless the administration was complete i.e. expenses and taxes of the estate were paid. Then there was a further condition for payment of donation of Rs.10 crores to a trust. After payment of such taxes etc., some sale proceeds and advances were distributed by the Administrator on which taxes were paid by the estate, therefore, there was no question of assessment of capital gains in the hands of the assessee as no capital asset was transferred. Even the High Court's order dated 22-10-01 declaring BW as having absolute rights of the properties would not result in giving any further rights to the assessee, because assessee's rights were limited to the rights provided in the indenture dated 26-9-01. 51. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perties from the administrator. These rights were acquired by the assessee in F.Y 01-02 and rights were to come into effect only after the death of BW who expired in August, 2003. in the meantime, after taking up the accounts Administrator chose to make distribution of certain money and in that process assessee received the impugned sum in F.Y 03-04 i.e. A.Y 04-05 which we are adjudicating. Now, even after such distribution the right to receive the sale proceeds continued, therefore, this right has not extinguished. The Ld. Sr. Advocate had argued that at best this can be termed as working out of rights as held by the Hon'ble Gujarat High Court in the case of CIT vs. Mohanbhai Pamahai [supra] which has been confirmed in turn by the Hon'ble Supreme Court in the case of Addl. CIT vs. Mohanbhai Pamabha [165 ITR 163]. Though this case pertained to a partner and the issue involved was whether relinquishment of interest in partnership upon retirement would amount to transfer or not and the ratio of this decision may not be strictly applicable to the case of the assessee, but the concept of "working out of the rights" in our view, can be applied to the facts of the case, because, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l paid up in respect of the preference share bears to the total paid-up equity capital of the company". Hence when as a result of the reducing of the face value of the share, the share capital is reduced, the right of the preference share holder to the dividend or his share capital and the right to share in the distribution of the net assets upon liquidation is extinguished proportionately to the extent of reduction in the capital. Such reduction of the right in the capital asset would clearly amount to a transfer within the meaning of that expression in s. 2(47) of the Income-Tax Act, 1961." Thus, from the above, it is clear that reduction in the face value of the preference shares was held to be an extinguishment because certain rights in terms of certain provisions of Companies Act, 1956 also stood reduced. However, in the case before us, the right of the assessee to receive the sale consideration has continued. The Ld. Sr. Standing Counsel did not elaborate as to how the assessee's right acquired under the indenture dated 26-9-01 got extinguished or diminished. In fact, as observed above such rights which were acquired in the F.Y 01-02 and became enforceable only on the death ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther discussion and interpretation of this provision. In view of the above detailed discussion, we are of the opinion, that there is no need to interfere in the order of the Ld. CIT(A) and accordingly we confirm the order of the Ld. CIT(A) and hold that receipt of Rs.71.63 crores is not taxable as business profits or short term capital gains in the hands of the assessee." 9. From the perusal of the above findings, it is seen that all the aspects relating to taxability and non-taxability of receipts in question have been dealt with by the ITAT very elaborately and same applies mutatis mutandis herein these appeals also. Even the CIT(A) has held so in para 9, 9.1 & 9.2 of the appellate order in the case of Nidhivan Investment & Trading Co. (P) Ltd. for the Assessment Year 2004-2005. In view of this, we do not feel necessary to give any separate finding. Therefore, respectfully following the same, we hold that issues involved in all these appeals to the extent of issues raised in the department appeals are covered by the decision of the ITAT in the aforesaid case. Now, we come to grounds as have been raised in various appeals. 10. ITA No.7847/Mum/2011(AY2004-05) (By Department):- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eded to be taxed under capital gain." Thus, the grounds raised by the department are same as it has been raised in ITA No.7847//Mum/2011 for the assessment year 2004-2005, which are similar in nature. In view of the finding given above, the grounds taken by the department in this appeal are treated as dismissed. 13. C.O.No.06/Mum/2012 (AY2005-06) (By Assessee):- Since in this year also the grounds of cross objection are same, therefore, in view of the finding given in CONo.05/Mum/2012 for the assessment year 2004-2005, the cross objection filed by the assessee is dismissed. 14. ITA No.3004/Mum/2009 (AY2005-06) (By Department):- In this appeal, the revenue has taken following grounds of appeal :- "1. The Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer of `.4,50,0000/- which the assessee had received from the estate of E.F. Dinshaw and assessee had not offered this amount to tax. 2. The Ld. CIT(A) has failed to appreciate that the above amount is revenue receipt." As the similar issue has already been decided above in ITA No.7847/Mum/2011, hence, for the reasons stated above that it is covered by the decision of ITAT (supra) as referred to above in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general in nature. 5. The learned Commissioner (Appeals) erred in not adjudicating on the Appellants contention that the Assessing Officer erred in initiating penalty proceedings u/s.271(1)(c) of the Income-Tax Act, 1961." Grounds No.1 and 5 are not pressed. The other grounds have become academic in view of the findings given in the departmental appeal in ITA No.2544/M/2009, wherein the departmental appeal has been dismissed and these being alternative plea, does not survive. Hence, the assessee's appeal is treated as dismissed. 17. ITA No.2205/Mum/2009 (AY2005-06) (By Assessee):- In this appeal, the assessee has taken following grounds of appeal :- 1. The learned Commissioner (Appeals) erred in not considering the alternative plea of the appellant that as the amounts received by the appellant could not have been distributed by the Estate of Mr. E.F. Dinshaw, the question of any amount being taxed in the hands of the appellant does not arise, since in his opinion this ground was consequential/general in nature. 2. The learned Commissioner (Appeals) erred in not giving a specific finding that the amounts distributed were out of 'advances' and not proceeds of sale and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtue of his agreement with Mrs. Bachoobai Woronzow, obtained ownership over the said properties in return for the consideration of `.20 lakhs (jointly with four companies principally held and controlled by him). II. On the facts and in the circumstances of the case and in law the Ld. CIT(A) otherwise also erred in not treating the amount of `.11.94 crs received by the assessee as a receipt from adventure in nature of trade." This issue is also squarely covered by the earlier decision of the Hon'ble ITAT as observed by us in ITA No.4573/M/2008 (supra) which have been reproduced above. Accordingly, the grounds taken by the department are dismissed. 19. CONo.03/Mum/2012(AY2004-05) (By Assessee):- This Cross Objection is arising in ITA No.1883/Mum/2011. The grounds raised in cross objection have been rendered academic and therefore, the Cross Objection has become infructuous and it is treated as dismissed. 20. ITA No.1888/Mum/2011(AY2006-07) (By Department):- In this appeal, the revenue has taken following grounds of appeal :- "1) On the On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding that the amount of `.26.25 crs received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No.2, it has been admitted by both the parties that the issue involved in the present case is covered by the decision of the ITAT in favour of the assessee in the assessment year 2005-2006 passed in ITA No.3119/M/2010 & 3122/M/2010, vide order dated 30-8-2011. The relevant findings of the ITAT are reproduced herein below:- 10. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on perusal of the papers on record, as well as the case laws cited before us, we find that this is a factual matter and reference to numerous case laws by both the parties is not required. This is a case where the assessee has invested large amount of money both in shares, as well as in mutual funds. The investments were made mostly through portfolio managers. The first appellate authority's finding of fact is that, the assessee has transacted sales on his own, only on eight occasions during the year. In contrast, the assessee had invested in 55 companies during the year. These figures, by no stretch of imagination, would lead us to a conclusion that the assessee is not the investor but a trader in shares. There is hardly any turnover done by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the conduct and the intention of an investor which has been established in the present appeal that the appellant had simply acted in the fashion to maximize the value of its wealth holding, in the shape of shares. Such an activity cannot be held a profit making activity of a business concern but safely it can be hold as a profit socking activity of an investor. Resultantly, our view goes in favour of the assessee, thus the grounds are allowed." 11. In the instant case, from the facts, it is clear that the assessee, at the time of purchase of shares, had no intention of doing business. The intention, at the time of purchase of shares, is that of an investor. No borrowed funds were used and there was no subsequent purchase and sale of shares. Thus, on these factual matrix, we uphold the findings of the Commissioner (Appeals) that the income in question should be assessed under the head "Capital Gains" and not under the head "Income From Business". Thus, this ground raised by the Revenue is dismissed. In view of the above, the ground No.2 raised by the department is treated as dismissed. In ground No.3 the department has challenged the disallowance made under Section 14A. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will or ltestament of Late Shri E.F.Didnshaw to the assessee Shri Nusli Wadia and he was not the legatee or the residuary legatee. (ii) In fact and in reality, the control, management and ownership of the properties consisting of the Estate of Shri E.F. Dinshaw vests totally with the assessee Shri Nusli Wadia who is in enjoyment of the fruits of the same and has to be held as the owner of these properties as there is no other claimant to these properties. (iii) That the assessee as the holder of the Power of Attorney of Late Mrs. Bachoobai Woronzow had possession and management control over the immovable properties and was in a position as owner to hand over the possession of the properties by receiving consideration. (iv) The Hon' High Court had conferred ;absolute ownership rights to Mrs. Bachoobai Woronzow, over the immovable properties of her late brother and the assessee had, by virtue of his agreement with Mrs. Bachoobai Woronzow, obtained ownership over the said properties in return for the consideration of `.20 lakhs (jointly with four companies principally held and controlled by him). II. On the facts and in the circumstances of the case and in law the Ld. CIT(A) other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Sec.48. The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :- (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto: From the above it is clear that while computing the capital gains only two kinds of expenditure can be deducted from full value of consideration, viz., [i] expenditure incurred wholly and exclusively in connection with such transfer and [ii] the cost of acquisition or any improvement thereto. The thrust of the argument of Ld. Counsel of the assessee is that portfolio advisory fee would constitute an expenditure which has been incurred in connection with the transfer, because obviously it cannot be argued that such expenditure was in the nature of cost of acquisition or improvement of the asset. The Ld. DR has specifically contended that portfolio advisory fee has nothing to do with the transfer and such fee was payable even if no shares were transferred or any purchase of shares we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of of Devendra Motilal Kothari vs. DCIT [supra] was distinguished mainly on the basis of decision of Hon'ble Bombay High Court in the case of CIT vs. Shakuntala Kantilal [supra]. The Pune Bench referred to various paras of Hon'ble Bombay High Court's decision in para-22 and ultimately concluded in para-23 that what was required was that the claim should be bona fide and claim for such genuine expenditure has to be allowed so long as incurring of the expenditure is a matter of fact and necessity. However, as pointed out by the Ld. DR this decision was specifically over ruled by the Hon'ble Bombay High Court in the case of CIT vs. Roshanbabu Mohd. Hussein Merchant [supra] and at placitum 18 it has been observed as under: "As regards the decisions of this court in the case of CIT vs. Shakuntala Kantilal [1991] 190 ITR 56 followed in the case of Abrar Alvi [2001] 247 ITR 312] and the decision of the Kerala High Court in the case of Smt. Thressiamma Abraham (No.1) [2001] 227 ITR 802 which are strongly relied upon by the counsel for the assessee, we are of the opinion that the said decisions are no longer good law in the light of the subsequent decisions of the ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder which income has to be assessed. Another example is brokerage incurred by a person while giving his property on rent. Though this expenditure is necessary for earning rental income but in the absence of any provision, this expenditure is not allowable. See the decision of Hon'ble Delhi High Court in the case of CIT vs. S. G. Gupta & Sons [149 ITR 253]. Therefore, in case before us as observed earlier the allowability of portfolio advisory fee has to be tested under the provisions of sec.48. As observed above, the Ld. Counsel of the assessee despite specific argument of Ld. DR did not show us as to how the portfolio fee has any connection with the transfer of asset and the same cannot be allowed. Therefore the theory that a particular expenditure is genuine and it is not disputed that same has been incurred and same was necessary for a particular purpose, the expenditure does not become allowable if there is no specific provision for the same. Therefore, in our view the expenditure incurred in connection with fee of portfolio management has nothing to do with the cost of acquisition of shares or transaction of shares and, therefore, is held to be not allowable. We find no force ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y requires the owner to clear all its liabilities on certain accounts and to keep the transferee indemnified. This stipulation cannot change the character of the retrenchment compensation from a liability arising out of the closure of the business to expenditure incurred wholly and exclusively in connection with the transfer of the asset in question." From the above it is clear that despite there being a condition for payment of retrenchment compensation before the transfer of the property i.e. there was a necessity for such expenditure till the same was held to be not allowable. Similarly, Hon'ble Delhi High Court in the case of Smt. Sita Nanda vs. CIT [251 ITR 575] was concerned with the issue regarding a claim of expenditure in respect of payment of unearned increase to the government for effecting the transfer of lease-hold rights. Again the Hon'ble High Court after quoting sec.48 observed as under: "A bare reading of the provision makes it clear that what can be deducted under section 48(i) is expenses incurred wholly and exclusively in connection with the transfer. The amount which the assessee claimed to be covered was not really a part of the unearned increase. On the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with this issue. The ld. CIT(A) on appeal rejected the claim on the basis that the claim could not be allowed in the absence of revised return by following the decision of the Hon'ble Supreme Court in the case of Goetze [India] Ltd. vs. CIT [284 ITR 323]. 17. Before us, Ld. Counsel of the assessee argued that assessee had made investment of Rs.30,000/- which was allowable as deduction u/s.80-C. This issue was taken up before the ld. CIT(A) who dismissed the same in view of the decision of the Hon'ble Supreme Court in the case of Goetze [India] Ltd. vs. CIT [supra]. He submitted that when claim is made for the first time before the appellate authorities, then same should have been allowed. He relied on the decision of Mumbai Bench of the Tribunal in the case of Chicago Pneumatics India Ltd. vs. DCIT [15 SOT 252]. 18. On the other hand, Ld. DR submitted that AO has no right to allow any claim in the absence of revised return and, therefore, ld. CIT(A) was correct in dismissing the claim particularly in view of the decision of Hon'ble Bombay High Court. 19. We have considered the rival submissions carefully and find that no doubt that a claim cannot be allowed without revised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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