TMI Blog2015 (10) TMI 2418X X X X Extracts X X X X X X X X Extracts X X X X ..... made u/s.14A - CIT(A) deleted the addition - Held that:- We find that the facts are identical to the facts considered in earlier assessment years. We, therefore, direct the AO to recompute the average investments in the line of A.Yrs. 2005-06 & 2006-07. We, therefore, do not find any error/infirmity in the findings of the Ld. CIT(A) - Decided in favour of assessee. Disallowance of depreciation in respect of portion of value shown in the books which represented over invoicing of assets as detected during the course of survey - Held that:- disallowance of depreciation made by the AO is not sustainable in law. This decision of the Tribunal was followed in A.Y. 2007-08 - Decided in favour of assessee. - ITA No. 1129/Mum/2012 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05,86,500/- being 10% of the total issue price at the time of subscribing to the warrants. As per the terms of issue the investors were required to pay the balance 90% at the time of conversion of said warrants into equity. Further in case the investors do not opt for conversion of the warrants, the upfront amount so paid stands forfeited by the company and all the rights attached to the warrants lapse automatically. None of the warrants holders exercised the option to convert any of the aforesaid warrants till the last date of conversion within 18 months from their respective entitlements. Accordingly, during the financial year under review, the Company forfeited the amounts of ₹ 6,05,86,500/- paid on the warrants due to non exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the forefeiture of application money on warrants is a capital receipt and therefore not chargeable to tax u/s. 28(iv) of the Act. 6. Aggrieved by this, the Revenue is before us. 7. The Ld. Departmental Representative relied upon the findings of the AO. 8. The Ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 9. We have carefully perused the orders of the authorities below and the factual matrix qua the assessee. An identical issue was considered by the Tribunal in ITA Nos. 3542 and 4801/M/2013 vide order dated 21.11.2014 wherein on identical set of facts the Tribunal has held that the amount of forefeited share application money transferred to warrant forefeiture account in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and own funds are sufficient for the purpose of investments in the shares of the subsidiary company. Strong reliance was placed in the decision of the Hon'ble High Court of Bombay in the case of CIT Vs Reliance Utilities and Power Ltd., in ITA No. 1398 of 2008. After considering the facts and the submissions the Ld. CIT(A) observed that in earlier assessment years i.e. A.Yrs 2005-06 and 2006-07, the same issue had arisen wherein his predecessor has held that there is no case for the disallowance of interest therefore disallowance of % of the average value of investment should meet the ends of justice and restricted the disallowance to ₹ 82,355/-. Following the decision given by his predecessor, the Ld. CIT(A) held that interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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