TMI Blog2017 (12) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.68 crores for A.Y. 2002-03 (Rs. 4.75 crores for A.Y. 2003-04) to the profit and loss account of the years under consideration. Since it is not the case of the assessee that the said sum represents capital receipt, learned CIT(A) concluded that the said sum should be treated as having been earned in the course of business activities carried on by the assessee and it is therefore revenue in nature. Double taxation - Held that:- The assessee stated that this issue can be remitted back to the file of the AO for verification of figures and facts and this should be taxed as the assessee itself offered income. We find that the plea of the assessee is quite reasonable and we direct the AO to allow the relief in response to double taxation of the same income. Learned CIT Departmental Representative also agreed to the proposal and stated that the issue can be remitted back to the file of the AO for verification of figures and consequentially allow relief to the assessee. Addition u/s 14A - sufficiency of own funds - As the learned Counsel for the assessee referred to the decision of Hon’ble Bombay High Court in the case of HDFC Limited [2014 (8) TMI 119 - BOMBAY HIGH COURT] wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee drew our attention to the following paragraphs of the assessment order: - The depreciation pertaining to lease transactions entered into during the previous year /is ₹ 2,66,10,2381- on various assets. Based on the stands taken by the Department in AYs 1995-96 to 2003-04, it can be concluded that the assessee is not entitled to any depreciation allowance u/s. 32 on the actual cost of the leased asset which was not really owned by it (actually owned by the lessee) but was held merely for the purpose of security of the loan given to the borrowers in the garb of lease transaction However, the capital or loan repayment component of lease rentals received during the previous year in respect of the lease alleged lease transactions which have been offered for taxation by the assessee in its return of income is being excluded from the assessed income. Accordingly, the depreciation on assets leased during the previous year of ₹ 2,66,10,238/- is also disallowed in its entirety. As a result against total depreciation claim of ₹ 15,09.82,3 161- on leased assets, depreciation of ₹ 14,24,20,719/- ₹ 11,58,10,481 + ₹ 2,66,10,238/- wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising out of ITA No.2574 to 2576/Mum/2010 for AY 1995-96 to 1997-98 vide order dated 30-04-2014 has allowed this claim vide Para 4 as under: - 4. We have heard the arguments of both the sides and also perused the relevant material placed on record. It is observed that while disposing of the aforesaid appeals of the assessee vide a common order dated 9-5-2012, the disallowance made by the AO and confirmed by the ld. CIT(A) on account of assessee s claim for depreciation on the assets purchased and given back on lease was sustained by the Tribunal relying on the decision of Special Bench of the tribunal in the case of M/s IndusInd Bank Ltd. Vs. Addl. CIT passed by the tribunal on 14-3-2012 wherein it was held that depreciation in the case of finance lease is not admissible to the lessor who is simply a nominal and symbolic owner of the asset whereas the real owner who bears all the risks and rewards incidental to the ownership is the lessee. In the judgment delivered subsequently in the case of I.C.D.S. Ltd. (supra), the Hon ble Supreme Court has held that even in the case of finance lease, the lessor is eligible to claim depreciation. As pointed out by the ld. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO in treating the notional gain arising on securitization of lease receivables as taxable receipt. For this assessee has raised following ground No.3: - 3. On the facts and in the circumstances of the case and in law, the learned commissioner of Income tax (Appeals) erred in confirming the action of the assessing officer to treat the notional gain on securitization of lease receivables as taxable receipt. 8. At the outset, the learned Counsel for the assessee stated that this issue is covered against assessee and in favour of Revenue by Tribunal s decision in assessee s own case for AYs 2000-01 to 2003-04 in ITA No. 6691 to 6694/Mum/2011 vide order dated 05-05-2015, whereby tribunal has considered this issue as under: - 14. As could be noticed from the para 8 of the learned CIT(A) s order the assessee accounted for receipt as income in its books whereas it is contended that it was notional income. Learned CIT(A) observed that the approach of the assessee is self contradictory. The company entered into lease securitization of lease receivables with Development Credit Bank for the purpose of availing finance. There is a gain to the assessee representing the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly. This additional ground is admitted and remanded back to the file of the AO and allowed for statistical purposes. 12. The next issue raised by assessee by way of additional ground is as regards to the order of CIT(A) confirming the action of the AO in disallowing expenses relatable to exempt income by invoking the provisions of section 14A of the Act. For this assessee has raised following additional grounds: - without prejudice to ground No. taxing the amount of ₹88.54 lakhs as income has resulted in double taxation of the dame income, as the whole amount of ₹ 18.56 crs. has been assessed to tax in subsequent years 205-06. . 13. We have heard the rival contentions and gone through the facts and circumstances of the case on this issue. Brief facts are that the assessee has earned dividend income and claim the same as exempt amounting to ₹87,33,559/-. The AO has noted the total borrowed funds, owned funds, investment in shares as under: - ( ₹ in Lakhs) Borrowings for specific projects 49322.2 Borrowed funds for general co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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