New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2017 (2) TMI 646 - ITAT MUMBAI

2017 (2) TMI 646 - ITAT MUMBAI - TMI - Addition made on share application money u/s.68 - Held that:- Respectfully following the order of the Tribunal in assessee’s own case on the very same ground, we do not find any infirmity in the order of CIT(A) for deleting the addition made u/s.68 of the IT Act as the identity and creditworthiness of the creditor and genuineness of the transaction stood satisfactorily explained. In the absence of any credible material with the Revenue to disprove the findi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d that these are pure reimbursement, not attracting provisions of section 195 of the Act. Accordingly, we dismiss the ground raised by the Revenue. - Disallowance on account of loss of stock - Held that:- Tribunal in assessee’s own case for the assessment year 2008-09 wherein assessee’s claim for deduction u/s.36(1)(vii) r.w.s. 36 was allowed in favour of the assessee as held that the conditions laid down in section 36(1)(vii) r.w.s. 36(2) of the Act have been complied with. - Decided again .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as port of circulating capital embarked in the business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss Thus would be of capital nature. Thus in the interest of justice, we restore this ground back to the CIT(A) for deciding in terms of decision above. - ITA No. 5704/Mum/2013, ITA No. 5643/Mum/2013 - Dated:- 24-1-2017 - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e course of scrutiny assessment, AO made disallowance on account of foreign exchange fluctuation loss, lost stocks. Addition was also made on share application money u/s.68. Disallowance was also made u/s.40(a)(i) of the Act. 4. By the impugned order CIT(A) deleted the addition made u/s.68 amounting to ₹ 2,41,12,500/- by following the order of earlier assessment year passed by its predecessor. We found that addition so made by AO and deleted by CIT(A) in the preceding assessment year 2007- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ticed that the ITA 864/MUM/2012 (Assessment Year : 2008-09) copy of FIRC furnished by the assessee reflects the name of the assessee as the beneficiary and the name of the sender/remitter - M/s.Linfox International Group Pty. Ltd., Australia was also mentioned. It is also noticed by the CIT(A) that FIRC shows purpose of the remittance as "towards share application". Quite clearly, the impugned sum has been received by the assessee through banking channels, and the material on record cl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion are same, respectfully following the order of the Tribunal in assessee s own case on the very same ground, we do not find any infirmity in the order of CIT(A) for deleting the addition made u/s.68 of the IT Act. 6. Disallowance made u/s.40a(ia) amounting to ₹ 5,79,95,330/- was restored back by the CIT(A) to the AO for verification and deciding afresh after having the following observation. I have considered the facts of the case. This issue has arisen in CIT(A)'s order of A.Y.2007- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was no element of income passed on to its group companies. Similarly the expenditure reimbursed on account of traveling and phone deposits were also not covered by provisions of sec. 195. However, the appellant also admitted that the reimbursement amount included payment on account of rent. Such payment on account of rent were chargeable under the I.T. Act and therefore, the provisions of sec. 195 were applicable in respect of such reimbursements. The A.O. is directed to invoke provisions of sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

195 of the Income-tax Act, 1961 ('Act'). In pursuance of the same, the Learned AO had called for various details. Learned A.R. placed on record copy of the submissions and documents submitted before the Learned AO vide letter dated 14 January 2016 establishing that the reimbursement of ₹ 5,79,95,330 was pure reimbursement without any mark up and therefore, does not attract provisions of section 195 of the Act based on various decisions of Bombay and other High Courts. We found tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd raised by the Revenue. 8. Assessee is aggrieved for disallowance on account of loss of stock. In this connection, the Assessee had submitted that the claim on account of deduction made by the customer (i.e. HUL) from the payments to the Assessee towards warehousing and transport charges on account of damages, shortage and for delays etc. In this regard, the copies of credit notes issued to HUL along with the corresponding details was submitted before the authorities and is also summarized at .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

housing and transport charges of ₹ 82,36,59,877 has been offered as income and therefore short recovery / deduction by the customer is allowable as loss under section 28/37 of the Act or as a bad debt under section 36(1)(vii) of the Act. 9. We found that similar issue has been dealt by Tribunal in assessee s own case for the assessment year 2008-09 wherein assessee s claim for deduction u/s.36(1)(vii) r.w.s. 36 was allowed in favour of the assessee after having the following observation:- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.s. 36(2) of the Act. Against such a decision, Revenue is in appeal before us. In the course of assessment proceedings, the Assessing Officer noticed that assessee had debited Provision for bad and doubtful debts of ₹ 65,40,000/- to the P&L Account. On being asked to explain, assessee contended that the impugned sum was in the nature of non-recoveries from the customers. It was explained that the ITA 864/MUM/2012 (Assessment Year : 2008-09) nature of the transaction was write off of no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o the consignee/consignor of the consignment, they recover the same from the bills of the transporter. The mode of recovery was deduction in the payment to the transporter. Such like claims stood at ₹ 65,40,000/- and assessee explained that there was no likelihood of recovery of such amounts from the customers in any time in future. Therefore, assessee had written-off such amount as non-recoverable. The assessee also explained that there was an error in reflecting the same as a Provision f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by appellant. On the other hand the appellant has explained that the Assessing Officer had made addition without asking for details of such provision actually not a provision. The appellant has explained that the amount of ₹ 65,40,000/- was actually not a provision but represented the actual amounts receivable from the clients which could not be recovered and hence constituted a bad debt. The amount represented short recovery of transportation charges from the clients on account of losse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

6(1)(vii) r.w. 36(2) of the Act were duly complied with. As per Supreme Court decision on this issue there was no requirement of establishing that such receivable have actually become bad. In the facts and circumstances the appellant's claim of ₹ 65,00,000/- was allowable as bad debt. The disallowance made by Assessing Officer is deleted. This ground of appeal is allowed." 10. Before us, the Ld. Departmental Representative has not advanced any arguments which would negate the fact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lso. Therefore, the CIT(A) has found that the conditions laid down in section 36(1)(vii) r.w.s. 36(2) of the Act have been complied with. We hereby affirm the aforesaid finding of the CIT(A) in the absence of any credible material or reasoning brought out by with the Revenue before us. Thus, on this aspect also Revenue fails. 10. We have considered rival contentions and carefully gone through the orders of the authorities below as well as order of the Tribunal dated 30/09/2015 in assessee s own .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version