TMI Blog2015 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to file evidence of user of the property in question. - Decided in favour of assessee for statistical purposes. Treatment of income - treat income of ₹ 4,04,382/- as capital loss as against business loss - Held that:- For Assessment Year 2005-06, under circumstances similar to those present for the year under consideration, the Tribunal has upheld the CIT (A)’s direction for treating the loss as a capital loss. Respectfully following the said Tribunal order, in the assessee’s own case for Assessment Year 2005-06, Ground No.2 raised by the department is rejected. - Decided in favour of assessee. Unexplained credits in the bank account - CIT (A) deleted the addition by accepting the additional evidence filed by the assessee - Held that:- CIT (A) correctly arrived at the conclusion that the amount of ₹ 4,91,02,322/- had been received by the assessee company from Hotline CPT Ltd. On the basis thereof, it was correctly observed that this amount could not be treated as unexplained cash credit u/s 68 of the IT Act. The department has not been able to successfully refute the well reasoned findings of fact recorded by the Ld. CIT (A) in this regard and we hereby confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in shares and securities. 3. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of ₹ 5,80,552/- made by the A.O. on account of written back liabilities. 3.1 The Ld. CIT (A) erred in accepting the additional evidences, when due opportunities were provided to the assessee during the course of assessment proceedings. 4. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals), has erred in deleting the addition of ₹ 4,91,02,321/- made by the A.O. on account of unexplained credits in the bank account of the assessee. 4.1 The Ld. CIT (A) erred in accepting the additional evidences when due opportunities were provided to the assessee during the course of assessment proceedings. 5. In the assessee s appeal, Ground No.1 states that since the Ld. CIT (A) has confirmed the disallowance of the claim of interest to the extent of ₹ 14,82,540/- as attributable to earning of dividend income on Mutual Fund, no further disallowance can be made in terms of Rule 8D of the IT Rules, since the said Rules are not relevant for the year under consideration. 6. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a similar situation had arisen before my ld. Predecessor while dealing with the appeal for the A.Y. 2005-06 in the assessee s own case. After detailed discussion of the relevant facts, my ld. Predecessor disposed off the issue in question in Para 6.9 of his order as under:- 6.9 Considering that the computation is based on the facts and figures of the Balance Sheet and the P L A/c for the year under consideration, the A.O. is directed to verify the facts and figures on all the investments the income from which shall lead to exempted income. The A.O. is directed to compute the disallowable amount under Rule 8D(2)(ii) and 8D(2)(ii). In case there is difference of opinion between the A.O. and the appellant on any item or manner of inclusion of that item under various components of Rule 8D(2), reasons for adoption of particular manner shall be given in the order giving effect to this order. Prima facie, the entire exercise shall result into enhancement of the disallowable sum u/s 14A of the Act. 4.5 In view of the above and looking to the commonality of facts and the argument of the ld. Counsel that one of the way of resolving the issue was to issue appropriate directions to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidend of ₹ 5683951/- which has been further reduced by the Assessing Officer by an amount of ₹ 17,16,417 on the ground that these are short term capital gain and not dividend income. The assessee has not disputed about the disallowance of expenditure to the extent of ₹ 53,00,505. The ITAT in assessment year 2005-06 has examined the activities of the assessee in detail and thereafter upheld the disallowance to the extent of ₹ 46,80,055 in assessment year 2005-06. We do not find any disparity on facts. The findings of the ITAT have already been extracted by the Learned CIT (Appeals). Respectfully following the order of the Co-ordinate Bench in the assessee s own case on similar facts and circumstances, we do not find any merit in this appeal of the revenue. It is dismissed. 10. The ld. Counsel for the assessee has submitted that since the facts for the year under consideration are no different from those present before the Tribunal for Assessment Years 2005-06 and 2007-08, the said orders of the Tribunal be followed and the CIT (A) be held not justified in restoring the matter to the Assessing Officer to consider disallowance in terms of Section 14A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of the assessee company during the year under consideration. The Ld. CIT (A) confirmed the rejection of the assessee s claim, observing that no detail for payment of property tax, water and electricity charges, other incidental expenses and expenses, if any, incurred in connection with repair and maintenance so as to bring the property in a habitable position have been furnished. 15. Before us, the ld. Counsel for the assessee has contended that first of all, the assessee s ownership of the building in question has nowhere been disputed by either of the authorities below. Attention has also been drawn to the affidavit of assessee s seller, a copy whereof has been placed before us at APB 103-104 and which has been accepted as such by authorities below, though no relief has been granted to the assessee on the basis thereof. Relying on Mysore Minerals Ltd. vs. CIT , 239 ITR 775 (SC), it has been contended that in a case of claim of depreciation on a building, the condition precedent is the ownership of the building. It has been contended that as per Mysore Minerals Ltd. (supra) a wide meaning must be given to the expression owner in Section 32 of the IT Act and where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business loss. 22. The Ld. DR has contended that despite the fact that the main business of the assessee is trading in shares and securities, the Ld. CIT (A) has wrongly held the loss of ₹ 4,04,382/- to be capital loss. 23. The ld. Counsel for the assessee has stated that the Tribunal for Assessment Year 2005-06, has upheld the CIT (A) s order for Assessment Year 2005-06 and that the facts being the same for the year under consideration, a similar order be passed. 24. For Assessment Year 2005-06, under circumstances similar to those present for the year under consideration, the Tribunal has upheld the CIT (A) s direction for treating the loss as a capital loss. Respectfully following the said Tribunal order, in the assessee s own case for Assessment Year 2005-06, Ground No.2 raised by the department is rejected. 25. As per Ground No.3, addition of ₹ 5,80,552/- made on account of written back liabilities has wrongly been deleted by the CIT (A) while erroneously accepting the additional evidence filed by the assessee. 26. Apropos this Ground, it is stated by both the parties that this Ground is consequential to Ground No.4. As such, this issue will be adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary explanation, which was not adequate and sufficient opportunity. The addition made was deleted on the basis of the evidence filed. 30. The addition of ₹ 5,80,552/- made on account of written back liabilities was deleted as a consequence of the deletion of the addition of ₹ 4,91,02,321/- made on account of unexplained credits in the bank account of the assessee. 31. The Ld. DR has contended that the Ld. CIT (A) has erred in deleting both these additions while wrongly accepting the additional evidence filed by the assessee, whereas due opportunity to furnish before him was duly afforded by the Assessing Officer during the assessment proceedings. 32. The ld. Counsel for the assessee, on the other hand, has placed strong reliance on the impugned order, to the relevant portions of which our attention has been drawn. The ld. Counsel for the assessee has also taken us through the relevant portions of the paper book in this regard. 33. The Ld. CIT (A) has deleted the addition of ₹ 4,91,02,322/-, observing as follows:- 8.8 Now coming to the addition of ₹ 49102321, as stated earlier, the claim of the appellant company is that it is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO would issue summons U/S 131 of the IT Act so as to facilitate calling for of information from M/s Hotline CPT Ltd. 8.9 As per the reply submitted by the ld. Counsel for the appellant company, vide his letter dated 27-9L2010, M/s Hotline CPT Ltd, vide its letter dated 06-9-2010 has made a categorical statement that the amount in question was paid by them to M/s Morgan Securities Credits (P) Ltd i.e. the appellant company in satisfaction of outstanding dues towards M/s Shivalik Bimetals Control Ltd and International Electron Ltd. For the sake of convenience, the relevant portion of letter dated 27-9-10 and the letter dated 06-9-2010 written by Hotline CPT Ltd is being extracted below:- Submission dated 27.9.2010: In relation to ground relating to addition of ₹ 4,91,02,321/- received from M/s Hotline CPT Ltd. in respect of build discounting facilities provided to them, as per your direction, the Assessing Officer issued notice u/s 131 to M/s Hotline CPT Ltd. for the purpose of confirmation and verification of cheques received from M/s Hotline CPT Ltd. We have been informed by the party that requisite confirmation has already been forwarded to the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our reference. 8.10 In view of the above, there remains no doubt that the money in question was received by the appellant company from M/s Hotline CPT Ltd and there was no justification for treating the same as unexplained cash credit u/s 68 of the IT Act, 1961. What appears to me is that the whole confusion has been created because of the manner in which the letter/reply was submitted by M/s Hotline CPT Ltd in compliance to notice u/s 133(6) of the IT Act, 1961. Now that the position has been clarified by M/s Hotline CPT Ltd in terms of its letter dated 06-9-2010, there remains no reason for sustaining the addition in question. Accordingly, the addition of ₹ 49102322 is being deleted. 34. From a perusal of the impugned order, it is clear that Hotline CPT Ltd. made certain purchases from Shivalik Bimetal Controls Ltd. and Intel Electron Devices Ltd. The bills issued by these two companies were discounted by the assessee company. Payments were made to them by the assessee by the Hotline CPT Ltd. Hotline CPT Ltd. had accepted Hundis, bills of exchange in favour of the assessee in this regard. During Assessment Year 2005-06, the assessee company duly accounted for the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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