Payments made for transmission of electricity by the transmission lines owned by PGCIL do not constitute payment for rent under section 194-I, it is not really necessary to go into this aspect of the matter. The question as to whether the definition of expression rent, introduced in section 194-I with effect from July 2006, is prospective or clarificatory is also, given our findings that, even on the touchstone of the definition of rent under the aforesaid provision, the payment for transmission of power will not constitute rent, not really relevant in the present context, and we see no need to deal with the same either.
With reference to the income treated as’income from other sources’, the CIT (A) analyzed the position of the income and noticed that it comprises of bad debts, miscellaneous receipts written back which were to be taxed under section 41(1) of the I.T. Act. With reference to the gratuity written back, he observed that assessee made provision for gratuity in earlier years which was not allowed as expenditure. Hence the write back of the same cannot be considered as income.
Whether the exemption u/s 54 will be available, in case, capital gain arising from sale of more than one residential house, is invested in one residential house. The ld. counsel appearing for the assessee argued that there was no restriction under section 54 that capital gain arising from two residential houses cannot be invested in one residential house. We find substance in the argument advanced by the Id. counsel for the assessee.
The Assessing Officer had considered that a common shareholder ‘P’ has substantial shareholding of more than 10 per cent. While analyzing substantial interest, the Assessing Officer has only considered Explanation 3 with reference to a person having beneficial interest entitled to not less than 20 per cent of income of such concern so as to attract provisions of section 2(22)(e). However, the Assessing Officer has not examined definition given in section 2(32) with reference to company which has a substantial interest in company, wherein it was specifically mentioned of carrying not less than 20 per cent of voting power. Admittedly, ‘P’ has less than 20 per cent shareholding in both companies, i.e., assessee as well as ‘A’. Therefore, reasoning given by Assessing Officer of a common shareholding by ‘P’ does not hold good. Further, it is an admitted fact that assessee is not owning any share in ‘A’ and provisions of section 2(22)(e) do not apply unless assessee is a shareholder in the company. For both the reasons, the order passed by the Commissioner (Appeals) was to be upheld.
RL is a tax resident of Mauritius and in support of this, tax residency certificate has been furnished. This fact has also been accepted by the learned DR in the written submission. It is also undisputed fact that, based on this tax residency certificate, the RL has applied for exemption certificate for grant of 100% DIT relief, which was granted by the Assessing Officer vide certificate dated 9-6-2000 upto the period of 31-3-2001 i.e. upto AY 2001-2002 (copy of which has been placed in the assessee’s paper book at page 5 filed on 8-11-2009). It was based on this certificate, that the assessee had sought tax relief in the return of income.
Learned counsel for the assessee fairly submitted that identical issue has come up in the case of Ramesh D. Tainwala in ITA No. 3853/Mum/2010 wherein the ITAT “D” Bench Mumbai concluded that provisions of section 28(va)(a) would apply and consequently the amount received by that assessee would be chargeable to tax as business income and not under the head capital gains.
This Miscellaneous application has been filed by the assessee requesting for recall of the order dated 24.9.2010 of the Tribunal in ITA No.6830/M/05. Apparent mistakes have been pointed out in relation to grounds at Sl.No.(A), (D) and (I) raised by the assessee in the appeal.
If cost of asset not doubted in earlier years, it can’t be held as sham if sold to parent co. at nil profit Transfer of shares held as investments by subsidiary to overseas parent co. at cost of acquisition is not a sham nor colourable device
We find that when a person was allowed to act as sub broker, he was initially allowed to issue even a contract note to his clients. Moreover, such sub broker could receive payments from clients and make payments to clients from his accounts. This position was changed vide Circular No. 9 (SEBI/MRD/MIRSD/DPS-1/CIR-31/2004) dated 26th August, 2004 as noted by the AO. But by this change assessee could still act as a remisier and the only restriction is that now he cannot issue the contract note for any transaction which has to be issued by the main broker. Even the payments were to be received and made by the main broker. However, assessee still remained entitled to his commission which was to be shared by the main broker with such remisier. Therefore, the assessee even after the change of regulation could have still acted and could have shared the commission with the main broker i.e. Sharekhan or he could have changed his broker or even he could have himself become a member of the stock exchange because he had a large client basis. Simply because assessee preferred to sell his business along with tangible assets would not mean that the agreement would become that of an agency. It still remained an agreement between a principal to principal. Therefore, in our opinion, it is a clear case of sale of assets and the Ld. CIT(A) has correctly decided the issue and accordingly we confirm his order.
Claim for deduction under Section 80IB cannot be denied in this year based on the findings given by the Assessing Officer or by the virtue of surrender of claim before the Assessing Officer. It is a duty casts upon the Assessing Officer or to the appellate court to see that if a deduction or a claim for exemption is statutory allowable, then the same has to be allowed, if the assessee fulfils the prescribed conditions required under the statute.
