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2016 (3) TMI 23 - ITAT MUMBAI

2016 (3) TMI 23 - ITAT MUMBAI - TMI - Revision u/s 263 - Rate of tax on LTCG - AO while making the assessment has computed the LTCG without indexation - whether CIT erred in not accepting the LTCG by exercising script-wise indexation and without indexation whichever is beneficial to the appeal? - Held that:- We have considered various citations submitted by AR of the assessee wherein the DCIT vs. Savla Motor Agencies (P.) Ltd. [2013 (7) TMI 650 - ITAT MUMBAI] co-ordinate bench of this Tribunal h .....

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ee

Disallowance of depreciation - Held that:- CIT ignored the relevant point in the computation before coming to the premature calculation that the order of AO iserroneous, thus this ground is allowed in favour of assessee - Decided in favour of assessee

Disallowance on account of amalgamation/demerger claimed u/s 35DD - Held that:- These addition were made by CIT either on the basis of mere estimation or by disallowing 50% of the disallowance claimed which is based on conj .....

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keeping in view the principle of consistency the assessee is entitled for similar relief in the year under consideration, hence this ground of appeal is also allowed in favour of the assessee. Resultantly we do not find that order of AO was erroneous or prejudicial to the interest of Revenue.- Decided in favour of assessee - ITA No. 4248/Mum/2010 - Dated:- 17-2-2016 - Shri D. Karunakara Rao, Accountant Member And Shri Pawan Singh, Judicial Member For the Petitioner : Shri Yogesh Thar (AR) For th .....

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rcumstances of the case, the learned Commissioner of Income-tax erred in not accepting the long term capital gain offer to tax by exercising the script wise option of indexation and without indexation whichever is beneficial to the appellant. The appellant submit that the long term capital gain be assessed by applying the provision of section 112(1) of the Income Tax Act 1961, and according the long term capital gain offer to tax by appellant be accepted. 3. On the facts and in the circumstances .....

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made without any justification and therefore it is prayed that the addition be deleted. 5. 3. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax erred in disallowing cost of employee of ₹ 7,48,459/- by estimating 50 percent of employee cost were incurred for business service centre . Since the income from business service centre were assessed as income from house property the disallowance were made on estimated basis. AO had made disallowance in the O .....

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. Since the income from business service centre were assessed as income from house property the disallowance were made on estimated basis without any justification. Therefore it is prayed that the disallowance made be deleted. 7. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax erred in disallowing expenses of ₹ 3,36,862 /- by estimating 50 percent of expenses of ₹ 6,73,725/were incurred for business service centre . Since the income from busi .....

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ct. The appellant submit that the addition made is on estimate basis without any justification and therefore it is prayed that the addition be deleted. 9. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax erred in assessing Short term capital gain of ₹ 36,33,874/- under the head income from business. The appellant submits that they had not carried out trading activity in securities and therefore there is no justification for assessing short term capi .....

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cted for scrutiny and after serving the statutory notice and giving the opportunity to assessee, the Assessing Officer (AO) passed the order u/s 143(3) of the Act on 18.12.2007 and assessed the income under various heads by making the following disallowance: (i) Income from House Property , after deducting the expenses and disallowing the depreciation of ₹ 25,30,432/- out of total income from House Property of ₹ 1,77,53,280/-. (ii) Disallowed ₹ 60,542/- as prior period expendit .....

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it from sale of share/investment through mixed method of taking the cost of acquisition as original cost and in some other cases on the basis of indexed cost depending upon the situation which is suitable to the assessee. The AO has computed the LTCG by adopting actual cost of acquisition on which rate applicable was 10% and re-computed the LTCG without indexation at ₹ 42,38,37,098/- though the assessee claimed through indexation amounting to ₹ 2,32,73,457/-, however, the AO increase .....

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estment in stock in share at ₹ 127,58,04,731/- and in the income from which is exempted, therefore, the disallowance made by AO is erroneous as well as prejudicial to the interest of Revenue. In respect of disallowance of other expenses on income from business the CIT concluded that the AO treated compensation received by assessee as income under the head House Property and allowed 30% deduction at ₹ 92,38,831/- on the basis of detailed submitted by assessee. The total expenditure in .....

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1611794/- similarly loan to M/s Parle Sales Services Ltd. has been shown to the extent of ₹ 75,17,000/-, and the AO has not examined the shareholding pattern of these two companies from the angle of deemed dividend to the assessee-company, therefore, the order is erroneous and prejudicial to the interest of Revenue ,and finally the AO accepted STCG shown by assessee at ₹ 36,33,874/- without making any proper enquiry and application of mind and the income was assessable under the head .....

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the tax @ 10%. The CIT disallowed ₹ 3,07,600/- on account of depreciation, ₹ 17,17,462/- on account of expenditure on amalgamation/demerger, ₹ 7,48,558/- on account of employee s cost incurred from business service centre, ₹ 1,80,745/- on account of legal expenses, ₹ 3,36,882/- on account of common expenses for business service centre, ₹ 32,91,128/- u/s 24 of the Act and ₹ 36,33,874/- by treating business income instead of STCG. However, in respect of di .....

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ect of treating the order passed by AO as erroneous and prejudicial to the interest of revenue, ground no. 2 to 9 are in respect of various addition made by the CIT while exercising its power u/s. 263 and ground no.10 is general in nature. Since the result of this ground would be ultimate result of other grounds raised in the present appeal, so instead of giving our finding on this issue at beginning, we shall give our finding after discussing the other ground raised in the present appeal. 9. Se .....

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sessee further has not taken LTCG without indexation amounting to ₹ 50,04,446/- in respect of sale of Prudential ICICI Mutual Fund, MIP on the ground that LTCG with indexation in this case is loss against treatment of assessee was not allowed in accordance with provision of section 112 and LTCG was totally works out to ₹ 50,04,446/- + 23,95,132/- = 73,99,578/-. The CIT while dealing with this ground has concluded that in computing the capital gain from sales of equity share and mutua .....

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exation comes to ₹ 26,93,32,814/- which figures tallies with the working made by assessee and rightly gains indexation was calculated to ₹ 42,25,28,155/- and total sales (-) total cost and after excluding STCG of ₹ 36,33,874/- the balance LTCG without indexation calculated to ₹ 43,88,94,281/- which was calculated by assessee at ₹ 41,64,37,520/- and calculated the tax which was not figured notice by AO after making adjustment the LTCG without indexation at ₹ 42 .....

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itled as CIT vs. Anuj A. Shah and (2012) 19 taxmann.com 359(Mum) titled as DCIT vs. Savla Motor Agencies (P.) Ltd., in Mohanlal N. Shah vs. ACIT the Co-ordinate Bench of ITAT, Mumbai while relying the judgment of Devinder Prakash Kalra has held that section 112 is not only a beneficial provision but is also mandatory and if several transaction have taken place by way of sale of share, the assessee can avail the benefit of indexation, in a few transaction and avail 10% tax rate in the remaining t .....

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by AR of the assessee wherein the DCIT vs. Savla Motor Agencies (P.) Ltd. reported vide (2012) 19 taxmann.com 359 (Mum) in ITA No. 3069/M/2010 co-ordinate bench of this Tribunal has held that LTCG should be worked out transaction wise and tax should be charged at 10% or 20% (without indexation or with indexation) respectively whichever is beneficial to the assessee after considering the judgment of Mohanlal N. Shah which has also relied upon by the assessee. Hence, we do not find any illegality .....

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at CIT while revising assessment misunderstood the calculation submitted by the assessee, the AR of the assessee has drawn our attention at page no. 28 & 29 of the Paper Book. He submitted that the AO in his order computed the income taking starting figure of ₹ 1,77,53,280/- and added a sum of ₹ 25,30,432/- on account of depreciation. The contention of AR of the assessee is that page 28 & 29 of the PB indicates clearly that the sum of ₹ 28,58,032/- is added to the net p .....

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ourth ground for our consideration is the disallowance made by CIT of ₹ 17,17,462/- on account of amalgamation/demerger claimed u/s 35DD, the CIT while making the addition has observed that assessee claimed amalgamation/demerger expenses of ₹ 37,61,835/- and the same was not considered to be correct as expenses of ₹ 17,17,462/- has been claimed back out of disallowance, hence there was a difference of similar amount which was disallowed by the CIT. The AR of the assessee has dr .....

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