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2015 (9) TMI 236 - BOMBAY HIGH COURT

2015 (9) TMI 236 - BOMBAY HIGH COURT - TMI - Revision u/s 263 - Assessing Officer had allowed the assessee's claim of deduction on account of premium paid on buyback of shares by merely assuming the facts, without applying his mind as per CIT(A) - Held that:- Assessing Officer as well as the Tribunal were satisfied that the amount paid by the Respondent-Assessee to buy-back shares of one group of share holders was only for the purpose of ensuring that it can run its business smoothly and more pr .....

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urpose of enabling smooth running of its business. It was further held that the aforesaid finding is essentially a finding of fact and the Revenue was not able to show that the finding is in any manner perverse and/or arbitrary. The above observation applies with equal force to the present facts. Decision of the Apex Court in the case of Brooke Bond [1997 (2) TMI 11 - SUPREME Court] is inapplicable to the present facts.

In view of the above, it cannot be said that the order of the Ass .....

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ndent : Mr Mihir Naniwadekar ORDER P. C. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act), challenges the order dated 28th September, 2012 passed by the Income Tax Appellate Tribunal (the Tribunal) for the Assessment Year 2006-07. 2. Although multiple questions have been raised on behalf of the Revenue, Mr. Suresh Kumar, learned Counsel appearing for the Revenue urges only the following question for our consideration:"Whether on the facts and in the circumstances of the .....

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sessee had debited a sum of ₹ 3.45 Crores to its profit and loss account. This being expenditure incurred towards buyback of shares. The Assessing Officer by his order dated 29th December, 2009 passed under Section 143(3) of the Act accepted the same while determining the taxable income. 4. Thereafter, on 31st March, 2011, the Commissioner of Income Tax in exercise of its powers under Section 263 of the Act passed an order in Revision, setting aside the Assessment Order dated 29th December .....

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lders was carried to the Company Law Board in proceedings for oppression and mismanagement. This dispute between the warring groups affected the business of the Respondent-Assessee, resulting in an arrangement being reached before the Company Law Board by which the Respondent-Assessee would buyback shares of one of the group of share holders and cancel the same. This was done by the Respondent-Assessee to only ensure that its business can prosper. The extra amount paid over and above the face va .....

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enue expenses. Therefore, the impugned order took a view that the decision taken by the Assessing Officer could not be said to be erroneous for the purpose of exercising powers of revision under Section 263 of the Act. 6. Mr. Suresh Kumar, learned Counsel appearing for the Revenue submits that the impugned order of the Tribunal in Echjay Industries (supra), was challenged before this Court. However, the same was dismissed not on merits but in view of the failure to remove office objections. In a .....

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he Act has specifically recorded that the facts situation in the case of Echjay Industries (supra) as well as in the present case are similar. Nevertheless he exercised his powers of revision as he was not clear whether the Revenue has accepted the order of the Tribunal in the case of Echjay Industries (supra). The memo of appeal also specifically states that the facts situation in Echjay Industries (supra) and the present case are identical. 8. On the aforesaid facts, the Assessing Officer as w .....

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h September, 2012 before this Court, being Income Tax Appeal No. 361 of 2013 (CIT v/s. M/s. Chemosyn Ltd.) . This Court by order dated 11th February, 2015 dismissed the Revenue's appeal from an order dated 7th September, 2012 of the Tribunal. This Court by an order dated 11th February, 2015 dismissed the Revenue's appeal, holding that expenditure so incurred by the Respondent-Assessee for purchase of shares and subsequent cancellation thereof was only for the purpose of enabling smooth r .....

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