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2015 (10) TMI 737 - ITAT MUMBAI

2015 (10) TMI 737 - ITAT MUMBAI - TMI - Procedure when assessee claims identical question of law is pending before High Court or Supreme Court u/s 158A - Amount received as a result of Indenture - whether Indenture signed by Late Sint. Bachoobai Woronzow, transferring her rights arising out of an agreement of 2" January, 1995 with developers, does not result in Capital Gain in the hands of the Assessee? - said question of law arising from the aforesaid receipts is identical with the question of .....

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the Appellate Authorities pass a reasoned order. A reasoned order presupposes application of mind by the authority concerned i.e.A0/Appellate Authority. They are required to elaborate the reasons as to why they oppose or accept the proposal submitted by the assessee.A one liner submission-" I agree/I do not agree" is a bald statement and is of no judicial value. As stated earlier such an order is not subject to appeal or revision. Therefore, it becomes more important that the authority handling .....

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l the final decision of the Hon'ble Court is delivered. As a result, we admit the declaration made by the assessee. Issue of nature of advance received by the assessee is to be kept in abeyance and has to be decided after receiving the order of the Hon'ble Bombay High Court for the earlier two AY.s. Appeal filed by the AO are kept in abeyance, as per the provisions of section 158 A of the Act.

No useful purpose will be served in calling the comments of the AO on identical declaration .....

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e question of law framed by the Hon'ble Bombay High Court - Decided in favour of assessee as directed

Disallowance under section 14A - CIT(A) restricted the disallowance to the extent of expenditure claimed by the assessee in the P & L account - Held that:- CIT(A) has observed that the total expenses debited in the P & L account is at ₹ 57,492/-. The AO himself has restricted the amount of disallowance to that extent. As per law, the disallowance of expenditure cannot go beyond .....

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, Judicial Member The above tilted two appeals one by the Revenue and the other by the assessee have been directed against the order dated 17.12.2012 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2007-08. First we take up the appeal of the Revenue. ITA No. 1785/M/2013 2. The Revenue has taken the following grounds of appeal: "i) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the s .....

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rlooking the crucial fact that the amount was received as a result of an agreement the assessee had entered into with Mrs. Bachoobai Waranzow creating an interest in the estate and therefore taxable as business income. iii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in concluding that the sum of ₹ 85 lakhs received by the assessee represents the sale proceeds of the properties in para 1.2 of the order and at the same time, holding that the amounts recei .....

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A by relying on the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Ltd. Vs. DCIT 328 ITR 81 (Born), ignoring that the Department has not accepted the said decision and SLP No. 12872 of 2011 has been filed against that decision. ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the disallowance u/s.l4A read with Rule 8D when this method of working of disallowance is held as reasonable method by jurisdictional H .....

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ble High Court has admitted the following question of law. "Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in coining to the conclusion that the amount received by the Assessee, as a result of Indenture dated 2611 September, 2001 signed by Late Sint. Bachoobai Woronzow, transferring her rights arising out of an agreement of 2" January, 1995 with developers, does not result in Capital Gain in the hands of the Assessee ?" 4. The Ld. .....

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said questions of law in the present case before any appellate authority or for reference before the Hon'ble High Court under section 256. It has therefore been requested to keep the present appeal by the Department for A.Y. 2007-08 in abeyance till the decision of the question of law framed by the Hon'ble High Court. The Ld. A.R. has further brought our attention to the order of the Tribunal passed in the own case of the assessee for A.Y. 2006-07 wherein also the assessee has filed a d .....

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de by the assessee has directed that the issue of nature of advance received by the assessee is to be kept in abeyance and has to be decided after receiving the orders of the Hon'ble Bombay High Court for earlier two assessment years. The relevant part of the order of the Tribunal for the sake of convenience is reproduced as under: "4.Before us, Authorised Representative(AR) stated that the assessee had filed declaration u/s.158 of the Act, that it would abide by the order of the Hon .....

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ment with the assessee that revenue's appeal for the year under appeal should be kept in abeyance on the above said substantial question of law, that the Tribunal could decide the case on merit. Departmental Representative (DR),after handing over the report of the AO, left the issue to the discretion of the Bench. 5. We have heard the rival submissions and perused the material before us.We find that the Hon'ble jurisdictional High Court has admitted following question of law: Whether on .....

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earlier two AY.s., that the AO has not given any reason for not agreeing with the proposal of the assessee to keep the issue in abeyance till the appeal filed by the department is not adjudicated by the Hon'ble Bombay High Court. In our opinion, the provisions of section 158A of the Act cast a duty upon the AO and the Appellate Authorities pass a reasoned order. A reasoned order presupposes application of mind by the authority concerned i.e.A0/Appellate Authority. They are required to elabo .....

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containing discussion of thought process of that authority, is no order in the eyes of law. In our opinion the comment of the AO opposing the proposal of the assessee falls under that category. It is to remembered that the Central Board of Direct Taxes have advised the officers of the department to avoid unnecessary litigation. In our opinion, the proposal made by the assessee is justified and no harm would be caused to the AO if the issue is kept in abeyance till the final decision of the Hon&# .....

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declaration under section 158A of the Act, hence in view of the findings of the Tribunal given on the comments of the AO on the declaration of the assessee, in our view, no useful purpose will be served in calling the comments of the AO on identical declaration filed by the assessee u/s 158A for the assessment year under consideration. Hence we dispense with the formality of seeking again the comment of the AO in view of the observations made by the Tribunal on similar declaration filed under s .....

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-06. Ground No.2 6. The ground No.2 raised by the Revenue is relating to the disallowance under section 14A of the Act. The Ld. A.R. of the assessee has stated that the Ld. CIT(A) restricted the disallowance to the extent of expenditure claimed by the assessee in the P & L account. The Ld. CIT(A) has observed that the total expenses debited in the P & L account is at ₹ 57,492/-. The AO himself has restricted the amount of disallowance to that extent. As per law, the disallowance of .....

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