TMI Blog2018 (7) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... The consent fee paid cannot be equated to a penalty which must necessarily be a punishment for infraction of a law or a regulation having statutory force. The fee is paid for the purpose of business to settle a dispute with the regulator SEBI and to be able to conduct its business without interruption - no infirmity in the findings of the CIT(A) - decided against revenue Allowance of long term capital loss - Loss was on account of liquidation of its foreign subsidiary company - Held that:- Findings of the AO given in A.Y 2005-06 clearly shows that it was during the year under consideration the assessee could make final realisation and, therefore, the difference of actual investments made in the foreign subsidiary company and actual amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained that the consent fee paid to SEBI was in settlement of on-going dispute and, therefore, it was incurred during the course of carrying on of the business and is, therefore, allowable as legitimate revenue expenditure. The CIT(A), convinced with the claim of the assessee, deleted the addition of ₹ 10,97,280/-. 5. Before us, the ld. DR strongly supported the findings of the AO and reiterated that the said payment was in violation of law. 6. Per contra, the ld. AR relied upon the findings of the CIT(A) and further relied upon the judgment of the Mumbai Bench of the ITAT in the case of ITO Vs. Reliance Share and Stock Brokers [P] Ltd ITA No. 274/MUM/2013. 7. We have carefully considered the orders of the authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in net, a loss of ₹ 2,63,96,983/- was the company on this account. Complete details of investments made and amount realized along with relevant documents, approval letter of RBI, submission dated 14.06.2007 filed during the course of assessment proceedings for the A.Y. 2005-06 and copy of the assessment order for the A.Y. are enclosed as Annexure No. 1. A loss of ₹ 2,12,16,371/- was worked out and accounted for in the books of account during the A. Y. 2005-06 on of liquidation of VLS International SA but the same had not been claimed return of income as the actual realizable amount form investments held by VLS International SA could not be determined at that point of time. The claim of capital loss was allowed to be claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed in the year under consideration. 13. Per contra, the ld. AR reiterated what has been stated before the lower authorities. 14. We have given thoughtful consideration to the orders of the authorities below. The case history of the assessee shows that the assessee accounted for a loss of ₹ 2,12,16,371/- in its books of account for the A.Y 2005-06. Loss was on account of liquidation of its foreign subsidiary company namely, VLS International SA. This fact comes out from the assessment order dated 14.12.2007 framed u/s 143(3) of the Act for A.Y 2005-06 and the relevant findings of the AO read as under: Therefore, the difference of ₹ 3,08,13,629/- of the investments/assets received from that WOS has been treated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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