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2015 (10) TMI 2418 - ITAT MUMBAI

2015 (10) TMI 2418 - ITAT MUMBAI - TMI - Addition representing forefeiture of warrants u/s. 28(iv) - Held that:- An identical issue was considered in M/s. Graviss Hospitality Ltd. case [2014 (12) TMI 139 - ITAT MUMBAI] 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 capital reserve, is a capital receipt only and cannot be taxed as income of the assessee, either u/s. 28(iv) or u/s. 41 .....

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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:- 9-9-2015 - N. K. Billaiya, AM And .....

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egration solutions, development and sale of software/telecom solutions. The return for the year was filed on 29.9.2009 declaring total income at ₹ 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 ₹ 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 ha .....

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ubscribing 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 f .....

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ated 22.2.2010 strongly contended that there are various judicial pronouncements by Hon'ble High Courts that forefeiture of share application money cannot be treated as receipts in normal course of business and therefore cannot be taxed in the hands of the issuing company. 4.1. The explanation furnished by the assessee did not find favour with the AO. The AO treated the sum of ₹ 6,05,86,500/- as income of the assessee by relying upon the decision of the Hon'ble Supreme Court in the .....

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re the facts are distinguishable from the facts in the case of T.V. Sundaram Iyengar (supra) and after considering various judicial decisions, the Ld. CIT(A) at para-9.4.11 finally held 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 .....

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ome of the assessee, either u/s. 28(iv) or u/s. 41(1) of the Act. We find that while deciding this issue, the Tribunal has considered the decision of the Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar & Sons (supra) and Hon'ble High Court of Bombay in the case of Sold Container (supra). Respectfully following the decision of the Tribunal, we confirm the findings of the Ld. CIT(A). Ground No. 1 is accordingly dismissed. 10. Ground No. 2 relates to the deletion of addition .....

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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 ₹ 2,31,13,114/-. 12.1. Before the Ld. CIT(A) it was strongly contended that the entire investments were made out of own capital and own funds are sufficient for the purpose of investments in the share .....

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