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TMI Blog2015 (10) TMI 2418X X X X Extracts X X X X X X X X Extracts X X X X ..... software/telecom solutions. The return for the year was filed on 29.9.2009 declaring total income at Rs. 46,63,20,700/-. The return was selected for scrutiny assessment. During the course of the assessment proceedings, the Assessing Officer noticed that the assessee has credited a sum of Rs. 6,05,86,500/- to the capital reserves account. The reasons for the same is mentioned hereunder: "During the year ended 31st March 2007, the Company had issued on private placement and preferential basis28,50,OOO convertible warrants carrying an option/entitlement to subscribe to equivalent number of equity shares of Rs.l0 each on a future date to the Prompters/ private corporate body. As per the terms, these warrants were due for conversion at the op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee did not find favour with the AO. The AO treated the sum of Rs. 6,05,86,500/- as income of the assessee by relying upon the decision of the Hon'ble Supreme Court in the case of CIT Vs T.V. Sundaram Iyengar & Sons Ltd. 122 ITR 344 and Hon'ble High Court of Bombay in the case of Solid Containers Ltd. Vs DCIT 308 ITR 417. 5. The assessee strongly agitated this addition before the Ld. CIT(A). The Ld. CIT(A) has considered this issue at para-9.3.1 of his order and at para 9.4.3 the Ld. CIT(A) was convinced that the application money received on issue of convertible share warrants cannot be characterized as a 'loan' or a 'deposit' and therefore the facts are distinguishable from the facts in the case of T.V. Sundara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O noticed that the assessee has made substantial investments. The assessee was therefore asked to explain why the expenses incurred in relation to dividend should not be disallowed. The assessee explained that it has not received any dividend during the year under consideration and further stated that it has not incurred any expenditure in making such investments in the shares of the subsidiary company. The AO did not accept the claim of the assessee. The AO was of the opinion that the assessee has not been able to show that the balance investments in shares have been financed only from interest-free funds. The AO thereafter proceeded to compute the disallowance as per Rule 8D and computed the same at Rs. 2,31,13,114/-. 12.1. Before the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver invoicing of assets as detected during the course of survey. 14. At the very outset, the Ld. Counsel for the assessee stated that this issue has been decided by the Tribunal in assessee's own case in A.Yrs. 2004-05, 2005-06 and 2006-07 in ITA Nos. 4036 to 4038/M/2011 and ITA Nos. 4466 and 4467/M/2011. The Ld. Counsel supplied the copies of the decision of the Tribunal. 15. The Ld. DR fairly conceded to this. 16. We find that an identical issue was considered by the Tribunal in ITA Nos. 4466 and 4467/M/2011 at para-32 of its order and at para-37 held that the disallowance of depreciation made by the AO is not sustainable in law. This decision of the Tribunal was followed in A.Y. 2007-08 in ITA No. 1128/M/2012. Respectfully followi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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