TMI Blog2015 (7) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred. The loss was on investment in the shares. The shares were received from the company/liquidator, as noted by the ld. CIT(A). Therefore, we hold that the loss is a capital loss. Pertinently, the issue raised by the assessee that it was a business loss stands decided against the assessee Denial of claim made u/s 80IA of the Act, in respect of earth station - Held that:- This issue stands consistently decided against the assesee by the Tribunal for the assessment years 1996-97 to 2000-01. Therefore, the facts remaining the same for the year under consideration also, this issue is decided against the assessee.The assessee had also claimed deduction u/s 80IA of the Act in respect of internet. It is seen that for assessment years 1999-2000 and 2000-01, the Tribunal has set aside this issue to the file of ld. CIT(A). Here also, the facts remaining the same, and in keeping in view the said appeal Tribunal order, this issue is remitted to the file of ld. CIT(A), to be decided afresh on affording due opportunity of being heard to the assessee. Liability to pay interest under section 234D - Held that:- Levy of interest u/s 234D would be applicable in these years in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the issue of allowability of repairs and maintenance expenses, i.e., prior period expenses being expenses pertaining to the year under consideration, is decided in favour of the assessee.The assessee has also claimed write-back of repairs and maintenance expenses disallowed in A.Y. 1999-2000, since the expenses related to prior period. These expenses are of ₹ 49,99,521/- for A.Y. 2000-01. Under similar circumstances, the A.O. should verify whether this write-back of repair and maintenance expenses was also subjected to tax for A.Y. 1999-2000, being disallowed in the assessment order and to take steps to avoid double taxation of the same amount as per the Tribunal order for A.Y. 2000-01, for the year under consideration also, we remit the matter to the file of the A.O. for making a similar verification and to allow relief accordingly. Levy of penalty u/s 271()(c) - disallowance of claim of business loss on account of ICO Global Holdings Ltd. - Held that:- Disallowance of a claim which is not found bogus or inherently incorrect or patently untenable would not ifso facto lead to the conclusion that the assessee has furnished inaccurate particulars of income or concealed par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/Mum/2005, Department s appeal for A.Y. 2001-02, ITA No. 1107/Mum/2008, assessee s penalty appeal for A.Y. 2001-02, and ITA No. 1835/Mum/2008, Department s penalty appeal for A.Y. 2001-02. First, we shall take up assessee s appeal in ITA No. 4221/Mum/2005 for A.Y. 2001-02. 2. As per ground No. 1.1, the ld. CIT(A) has erred in holding that in the computation of its business income, the assessee was not entitled to deduction of ₹ 5.17 crores in respect of loss in the value of shares of ICO Global Holdings Ltd. 3. This issue, it is seen, stands decided against the assessee by the Tribunal in the assessee s own case for A.Y. 2000-01, in ITA No. 4220/Mum/2005, vide order dated 7-3-2014, holding as follows; ..In the case in hand the purpose of investment at the most can be said for acquiring or having access to the new advanced technology in the mobile telecommunication system, which could be treated as acquisition of a new and modern profit making apparatus. The loss suffered due to the devaluation of the investment is on capital account. In view of the above discussion, we do not find any error or illegality in the order of ld. CIT(A) qua this issue. (Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case relating to liquidation (page 9, last line of the impugned order). However, the ld. CIT(A) has not considered that the shares of I.C.O. Global Holdings Ltd. were actually transferred. The loss was on investment in the shares. The shares were received from the company/liquidator, as noted by the ld. CIT(A). Therefore, we hold that the loss is a capital loss. Pertinently, the issue raised by the assessee that it was a business loss stands decided against the assessee by the Tribunal on the case for A.Y. 2000-01. 9. As per ground No.2, the ld. CIT(A) erred in denying the claim made u/s 80IA of the Act, in respect of earth station. The A.O. made the disallowance on the basis of a similar disallowance made for A.Y. 1996-97. The ld. CIT(A) confirmed the same. 10. This issue stands consistently decided against the assesee by the Tribunal for the assessment years 1996-97 to 2000-01. Therefore, the facts remaining the same for the year under consideration also, this issue is decided against the assessee. 11. The assessee had also claimed deduction u/s 80IA of the Act in respect of internet. It is seen that for assessment years 1999-2000 and 2000-01, the Tribunal has set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We order accordingly and remit the issue to the A.O. for the purpose, to be decided afresh in accordance with law, keeping in consideration the above decisions. 16. As per ground Nos. 4 5, the ld. CIT(A) erred in confirming the reduction in the cost of depreciable fixed asset by ₹ 4.28 crores and in taxing the non-adjustment of cost of fixed asset, the depreciation of ₹ 1.07 crores on the amount of ₹ 4.28 crores. According to the assessee, these adjustments had been carried out in the subsequent year. 17. Here, it is not disputed that the assessee had, in the succeeding year, suo motu made the necessary adjustments and reduction in the cost of depreciable fixed asset. It is only a question of time taken. In fact, there is no revenue loss. Therefore, ground No. 4 5 are accepted, directing the A.O. to make necessary verification and grant relief accordingly. 18. Ground No. 6 states that the ld. CIT(A) has erred in partially disallowing certain late remittances of Provident Fund (PF) concerning the contribution by the management towards PF and pension fund. It is not the case of the Department that the payments were made beyond the due date of filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MMRDA Ltd. for the leasehold rights acquired by the assessee through the lease deed dt. 22nd November, 2004. It is the say of the Revenue that this lease premium was liable for deduction of tax at source failing which the assessee is to be treated as assessee in default. It is the say of the assessee that such lease premium is in the nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, the said lease premium does not come within the purview of the definition of rent as provided u/s. 194-1 of the Act. 10. We have carefully perused the lease deed as exhibited from page-1 to 42 of the Paper Book. A careful reading of the said lease deed transpires that the premium is not paid under a lease but is paid as a price for obtaining the lease, hence it precedes the grant of lease. Therefore, by any stretch of imagination, it cannot be equated with the rent which is paid periodically. A perusal of the records further show that the payment to MMRD is also for additional built up are and also for granting free of FSI area, such payment cannot be equated to rent. It is also seen that the MMRD in exercise of power u/s. 43 r.w. Sec. 37(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowability of repairs and maintenance expenses, i.e., prior period expenses being expenses pertaining to the year under consideration, is decided in favour of the assessee. 25. Apropos, the issue of prior period expenses paid during the year under consideration, the Tribunal has allowed relief to the assessee vide its order of A.Y. 2000-01 (supra), therefore, this ground is infructuous. 26. The assessee has also claimed write-back of repairs and maintenance expenses disallowed in A.Y. 1999-2000, since the expenses related to prior period. These expenses are of ₹ 49,99,521/- for A.Y. 2000-01. Under similar circumstances, the A.O. should verify whether this write-back of repair and maintenance expenses was also subjected to tax for A.Y. 1999-2000, being disallowed in the assessment order and to take steps to avoid double taxation of the same amount as per the Tribunal order for A.Y. 2000-01, for the year under consideration also, we remit the matter to the file of the A.O. for making a similar verification and to allow relief accordingly. ITA 4219/Mum/2005 for A.Y. 2001-02 (Revenue s appeal) 27. The first ground in this appeal by the Department fir A.Y. 2001-02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars of income. Disallowance of a claim which is not found bogus or inherently incorrect or patently untenable would not ifso facto lead to the conclusion that the assessee has furnished inaccurate particulars of income or concealed particulars of income attracting levy of penalty U/s 271 (1)(C). The assessee has disclosed all the relevant facts and details in respect of the claim during the assessment proceedings and the claim has been specifically explained through the notes of the return of income. Therefore, we find that the penalty on the disallowance of claim of business loss on account of written down value of shares of ICO Global in the facts and circumstances of the case does not warrant levy of penalty. Accordingly, we delete the penalty on this account. 34. For parity of facts for the year under consideration also, the levy of penalty on this count is deleted. 35. Penalty was also levied on disallowance of deduction u/s 80IA of the Act on income from earth station undertaking. This penalty amounting to ₹ 75.56 crores, The ld. CIT(A) confirmed the same. Here also for A.Y. 2000-01, the Tribunal has deleted the penalty holding as follows:- 18.2 Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has claimed higher depreciation in view of the Information Technology Act, and supported its claim by the various decisions of this Tribunal, wherein the switches and routers are held to be the part of the computer for the purpose of depreciation U/s 32 of the Act. Even otherwise there is no dispute about the asset in question and the higher rate of depreciation is only a question of interpretation of definition of the computer. Therefore, when the assessee has disclosed and explained all the relevant facts and details relevant to the claim of higher depreciation on GDS, then we do not find that merely claiming a higher depreciation which is otherwise supported by the various decisions would lead to the conclusion that the assessee has furnished inaccurate particulars or concealed particulars of income. In view of our finding in the quantum appeal on this issue, we are of the considered opinion, that disallowance of higher depreciation on GDS switches does not warrant levy of penalty u/s 271(1)(C). Accordingly, in the facts and circumstances of the case, we do not find any error or illegality in the order of CIT(A) in deleting the penalty on this account and hence we d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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