9911796707
TMI Blog2019 (9) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a sufficient cause for the delay on the part of the assessee-company in filing its Cross Objection before the Tribunal. Even the ld. D.R. has not raised any objection in this regard. The delay on the part of the assessee in filing the Cross Objection is accordingly condoned. 3. Ground No. 1 raised by the Revenue in its appeal as well as the grounds by the assessee-company in its C.O. involve a common issue relating to the claim of the assessee for deduction on account of various expenses. 4. The assessee in the present case is a Company, which is engaged in the business of letting out of property, financing and investment & trading in shares. The return of income for the year under consideration was filed by it on 23.09.2010 declaring total income of 'NIL'. The assessee-company during the year under consideration had derived income from house property situated at Kolkata and Mumbai amounting to Rs. 5,52,56,125/- and had adjusted the same against the business loss of Rs. 4,51,99,148/- claimed to be incurred during the year under consideration. As noted by the Assessing Officer, service charges of Rs. 86,76,000/- received by the assessee from the tenants of Kolkata and Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed that 40% of personnel expenses, travelling & conveyance expenses, vehicle maintenance, communication expenses and miscellaneous expenses may be treated as pertaining to 'income from house property' and hence were not allowable as business expenditure. In the assessment for the year under present appeal, the assessing officer has disallowed 40% out of personnel expenses, travelling & conveyance, vehicle maintenance, communication expenses, legal & professional fees, office maintenance fees and miscellaneous expenses. As discussed earlier, in the appellate order for immediately preceding year, my predecessor had confirmed such disallowance in respect of personnel expenses, travelling & conveyance, vehicle maintenance, communication expenses and miscellaneous expenses, but allowed expenditure, inter alia, under the heads of 'legal and professional expenses' and 'office maintenance' fully, as the same were considered essential for running of the company. The material facts in the year under consideration are practically same. Therefore, respectfully following the decision of my Ld. predecessor, disallowance of 40% out of legal and professional expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see are chargeable to tax. The Assessing Officer held the said receipts as income from house property while the ld. CIT(Appeals) treated the same as business income as claimed by the assessee. It is observed that the total service and maintenance charges of Rs. 90,38,482/- were received by the assessee during the year under consideration and the details of the same are given at page no. 223 of the assessee's paper book. 11. A perusal of the above details clearly shows that out of Rs. 90,38,482/- received by the assessee towards service and maintenance charges, a sum of Rs. 71,25,442/- was received on account of recovery of electric charges. This amount, which constitutes about 80% of the total service and maintenance charges, appears to be recovery made by the assessee from the tenants towards common electric charges and we are unable to understand what exactly are the services that are required to be rendered to collect the common electricity charges from the tenants that can be termed as an independent business activity of the assessee. Even the exact nature of the balance amount received by the assessee on account of service and maintenance charges is not very clear from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow Ground No. 1 of the Revenue's appeal while Ground No. 2 of the Revenue's appeal and Grounds No. 1 & 2 of the assessee's appeal are treated as allowed for statistical purposes". 8. As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that A.Y. 2009-10, we respectfully follow the order of the Tribunal for A.Y. 2009-10 and restore the order of the Assessing Officer treating the income received by the assessee by way of service charges as income from house property. We also restore the issue relating the allowability of various expenses claimed by the assessee to the file of the Assessing Officer for deciding the same afresh as per the same direction as given by the Tribunal for A.Y. 2009-10. Ground No. 1 of the Revenue's appeal as well as the grounds No. 1 & 2 of the assessee's Cross Objection are accordingly treated as allowed for statistical purposes. 9. In Ground No. 2, the Revenue has challenged the action of the ld. CIT(Appeals) in allowing the claim of the assessee for long-term capital loss of Rs. 7,25,08,426/-. 10. During the year under consideration, the subsidiary of the assessee company namely M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Singapore called Shalimar Singapure PTE Ltd. As per the balance sheet of the appellant as on 31.03.2009, it was holding 15 lakh shares of the subsidiary which were valued at Rs. 667.1 lakhs. The said investment stood totally liquidated as on 31.3.2010. As per 'notes on accounts', SSPL was liquidated vide order dated 6.11.2009 and an amount of Rs. 1,23,22,005/- was received as the full and final statement. The appellant has also produced documentary evidence to establish that SSPL was liquidated and its name was struck off from the resister of 'Accounting and Corporate Regulatory Authority, Singapore' on 6.11.2009. It is true, that the amount of Rs. 1,23,22,005/- was received by the appellant prior to the final liquidation. However, it has been clarified that the amount was received from SSPL as interim payment towards refund of investment, which was treated by the appellant as advance. After final liquidation of the company, no further amount was received by the appellant and a sum of Rs. 1,23,22,005/- became the full and final settlement for the shares of SSPL. The assessing officer has expressed the doubt as to how the transaction can be called a transfer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of sub-clause (c) of clause (22) of section 2 and the sum so arrived at shall be deemed to be the full value of the consideration for the purposes of section 48". 13. Relying on the decision of the Hon'ble Gujarat High Court in the case of CIT -vs.- Jaykrishna Hariballav Das [112 Taxmann 683], the ld. D.R. has contended that the provisions of sub-section (2) of section 46 are clearly applicable to the facts of the present case and neither the Assessing Officer nor the ld. CIT(Appeals) having considering the issue in the light of the said provisions, the matter may be sent back to the Assessing Officer for deciding the same afresh. The ld. Counsel for the assessee, on the other hand, has contended that there being no distribution of assets by the Company in liquidation in the present case and the assessee having received a consideration for extinguishment of its interest in the shares of the Company, section 46 has no application. We are unable to accept this contention of the ld. Counsel for the assessee. In our opinion, the assessee-company having received money as shareholder on the liquidation of a Company, sub-section (2) of section 46 is clearly applicable and the capit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
