TMI Blog2016 (3) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... me is positive no interest disallowance can be made.- Decided in favour of assesse Disallowance of claim of bad debts - Held that:- The issue is covered in favour of assessee vide order of the Tribunal in assessee’s own case for A.Y.2007-08 upholding the action of CIT(A) for deleting disallowance of bad debts. Also see CIT Vs. Shreyas S. Morakhia [2012 (3) TMI 103 - BOMBAY HIGH COURT ].- Decided in favour of assesse Disallowance of depreciation on VSAT (Very Small Aperture Terminal) - Held that:- Respectfully following the order of the Tribunal in assessee’s own case for earlier AYs we confirm the action of CIT(A) for deleting the disallowance of depreciation on VSAT.- Decided in favour of assesse Disallowance of Vanda loss - Held that:- Respectfully following the order of the Tribunal in assessee’s own case for earlier AYs we confirm the action of CIT(A) for deleting the disallowance - Decided in favour of assessee Disallowance of mark to market loss - Held that:- CIT(A) has deleted disallowance by relying on the order of special bench of the Tribunal in the case of CIT Vs. Bank of Baharain [2010 (8) TMI 578 - ITAT, MUMBAI ]. The issue is covered in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim and CIT(A) confirmed the action of the AO. 4.1 We have considered rival contentions and perused the record. The issue under consideration is covered by the order of the Tribunal in assessee s own case for the assessment year 2007-08, vide order dated 21-1-2015. The relevant para of the Tribunal order reads as under :- 26. Reverting to ground no. 4, the fact that the assessee acquired customers rights when it acquired the business, the assessee claimed the expenditure to be capital in nature and claimed depreciation. The revenue authorities denied the claim of depreciation holding the transaction of acquiring customers rights to be sham. 27. Before us, the AR placed reliance on the decision of i) Hidelberg Cement India Ltd. vs Addl. CIT -31 DTR 582(Mum) In this case non-compete fees was paid for a period of 1 year and the same was allowed as revenue expenditure. ii) CIT v Everest Advertising (Bombay High Court) In this case non-compete fees was paid for a period of 3 years and the same was allowed as revenue expenditure. Sr.No. Case law Citation i. India Capital M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt broker. The company AFC had a strong clientele base of 3709 persons which itself show that AFC was holding a strong repute in the eyes of its clients. Undoubtedly by purchase of rights to do the business with these 3709 clients the assessee has actually purchased the goodwill of AFC [Para 15] Commercial rights gain significance in the commercial world as they represent a particular benefit or advantage or reputation built over a certain span of time and the customer associate with such assets. [Pam 17] It is not in doubt or dispute that purchase of the clientele business by the assessee from AFC is a right which can be used as a tool to carry on the business. It can also be seen from the angle of purchase of entire marketing network by the assessee in AFC Even if considered from this angle the assessee is eligible for depreciation on payment of ₹ 2.5 crores [Para 20] . 28. The AR, therefore, pleaded that being genuine expenditure incurred for the purposes of acquiring business, the depreciation has to be allowed to the assessee. 29. The DR submitted that the assessee had not given classification on the expenditure. 30. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.5072/Mum/2005, dated 13-4-2011. Respectfully following the proposition of law laid down in these cases, we direct the AO to delete the disallowance of interest. 6. With regard to disallowance of other expenditure ld. AR placed on record an order of Tribunal in the case of group concern i.e. M/s Stock Holding Corporation of India Ltd., ITA No.5348/Mum/2012 for assessment year 2009-2010. , wherein it has been held that before applying provisions of Rule 8D, the AO was duty bound to record his dissatisfaction that the working of disallowance made by the assessee u/s.14A of the Act was incorrect. It was also brought to our notice that in the case of sister concern of the assessee similar working was accepted by the AO for A.Y.2009-10 to 2011-12. It was submitted by ld. AR that for A.Y,2008-09, in the case of sister concern of the assessee, the AO had calculated disallowance u/s.14A of the Act in accordance with Rule 8D which was challenged before the Tribunal. The Tribunal accepted the contention of assessee and sent the matter back to the file of AO to recompute the disallowance u/s.14A of the Act in accordance with the method adopted by the assessee. The AO in the set aside pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71/Mum/2008; and iv) A.Y.2007-08 being ITA No.168/Mum/2011. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal, as stated above, we confirm the action of CIT(A) for deleting the disallowance of depreciation on VSAT. 9. The revenue is also aggrieved for deleting disallowance of Vanda loss. The assessee incurred net loss on account of Vanda transactions of ₹ 82,68,912/-. The assessee claimed the said loss as normal business loss u/s.28/37(1) of the Act. The AO was of the view that the said loss is speculative in nature as per Explanation to Section 73 of the Act as the loss arising from the transactions were carried on by assessee himself for its own purpose. 9.1 We have considered rival contentions and found that the issue is covered in favour of assessee vide order of the Tribunal in assessee s own case for A.Y.2007-08 in ITA No.168/Mum/2011 dated 21.1.2015. The issue is also covered in favour of the assessee vide order of the Tribunal in the following cases :- i) Parkar Securities Ltd., 102 TTJ 235 (Ahd); and ii) Rajvi Securities (P) Ltd., 50 SOT 592. As the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The grounds taken by the revenue in its appeal with regard to disallowance on bad debts, depreciation non VSAT, disallowance on Vanda loss, mark to market loss, depreciation on goodwill, are the same as discussed in the assessment year 2009-2010. Following the reasoning given in the assessment year 2009-2010, we confirm the action of CIT(A) in terms of our observation given in the assessment year 2009-2010 above. Assessment Year 2008-09 : 14. In this year, the assessee is aggrieved for disallowance on foreign exchange loss. The issue is covered in favour of the assessee vide order of the Tribunal in assessee s own case for the assessment year 2007-08, ITA No.168/Mum/2011, dated 21-1-2015. As the facts and circumstance during the year under consideration are same, we direct the AO to delete the disallowance on foreign exchange loss. 15. Next grievance pertains to disallowance u/s.14A. As the reasoning for disallowance are same as discussed in the assessment year 2009-2010, following the same reasoning, we direct the AO to delete the disallowance of interest. Disallowance of other expenses is to be worked out afresh as per the direction given in the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of holding of an asset as per the explanation 1 to section 42A, if the asset is found to be held by an assessee for not more than 36 months immediately preceding the date of its transfer, the same will fall in the definition of short term capital asset and if the period is more than 36 months then the asset will fall in the definition of long term capital asset. As per the express provisions of clause (ha) as reproduced above, for determining the holding period of capital asset being equity shares allotted in pursuance to demutualisation or corporatisation of a recognised stock exchange in hand, the period for which the assessee was a member of the recognised stock exchange prior to such demutualisation or corporatisation shall also be included. Hence, the holding period of the asset is to be calculated from the acquisition of date of BSE card and not from the date of conversion of BSE card into equity shares. As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisation or corporatisation shall be the cost of acquisition of his original membership of the exchange. For the sake of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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