We have heard the learned Departmental Representative, whereas assessee was not represented, hence decided exparte. Considering the order of the Assessing Officer and the CIT (A) and various explanations filed before the authorities, we do not see any reason to interfere with the order of the CIT (A).
If the expenditure was incurred for operation and work of existing profit making apparatus, it would be revenue in nature, but in case expenditure was on addition or augmentation of profit making apparatus the nature of the expenditure would be capital.
The ld AR has submitted that the actual rent received by the assessee is not more than the standard rent of the property in question as per Maharashtra Rent Control Act 1999. He has filed the paper book containing 32 pages and submitted that the documents at Sl nos. 3 to 8 of the paper book were not before the lower authorities.
In the case of DDIT, Mumbai V/S M/s. Star Cruises (India) Travel Services P. Ltd. vs. 2009-TIOL-351-ITAT-Mumbai Tribunal has again considered identical situation in which the tax was paid in consequence of the order passed by the A.O. u/s.195(2) in the said case, and also after considering Circular No.769 dated 06.08.1998 and Circular No.790 dated 24.02.2000 issued by the CBDT held that assessee is entitled for interest under sec. 244A of the Act.
It is clear from the finding of the CIT (A) that while deciding the issue of setting off of brought forward loss, the crucial and vital fact of date of filing the return and revised return has been overlooked. In view of these facts, the order of the CIT (A) is not sustainable. We, accordingly, are of the opinion that if the assessee has filed the return well within the time as prescribed u/s 139(1), then the claim of setting off of brought forward loss made in revised return filed within the time limit as prescribed u/s 139(5) cannot be disallowed. Consequently, we set aside this issue to the record of the Assessing Officer for limited purpose of verifying the date of filing of the return and revised return and then allow the claim of the assessee, if the return of income is filed within the period of limitation.
The assessee is a owner/host of website www.shaadhi.com where individuals can register and exchange the relevant information for matrimonial alliances on payment of appropriate subscription amount. The facility is available to the resident as well as non residents. Vide service order dated 14.6.2004, the assessee availed the service of Rackspace. The said contract was extended and modified on 1.1.2007. The Rackspace offered advanced type of dedicated hosting solution to the assessee. The services provided by Rackspace to the assessee are stated by the Assessing Officer in the order u/s 201(1) and 201(1A) in para 3 as under:
In a lease transaction also there can be only one owner of the asset, that is, either the lessor or lessee and not both of them or either of them at their discretion. Whereas in the case of operating lease, it is the lessor who is the real owner of the asset, but in case of finance lease, it is the lessee who is to be regarded as the real owner of the asset. Ex consequenti only the lessor can claim depreciation in case of an operating lease and the lessee in a case of finance lease. There is no question of deciding between the lessor and the lessee, as to who should be conferred the benefit of depreciation allowance. Adverting to the facts of the instant case, it can be seen that it is a case of finance lease agreement. The only and the inescapable conclusion which in our considered opinion follows is that the real owner of the leased property is Indo Gulf Fertilizer & Chemical Corporation Limited and not the assessee. We, therefore, decline to grant any depreciation to the assessee-lessor. However the lessee, if so advised, may take recourse to the legal remedy if any, for the grant of depreciation.
ITAT Mumbai ruling: Transponder2hire charges not ‘royalty.’ Times Global wins tax case vs. DCIT for A.Y. 2007-08. Consultancy fee allowed. Full details here.
The Tribunal referred to CBDT circular No. 8/2005, dtd. 29.08.2005 and opined that once fringe benefit tax is levied on expenses incurred, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business.
Mumbai Bench of ITAT observed that the term loan from IDBI was borrowed by the assessee for the purpose of acquiring a capital asset. Accordingly, ITAT held that the waiver of loan from IDBI was a capital receipt and not taxable u/s 28(iv) or 41(1). ITAT observed that the remission or reduction of liability, which is created on capital account, cannot to our mind result in a revenue receipt making it taxable u/s 28(iv) or 41(1) of the Act and that the waiver of such term loan does not constitute business and the waiver can not be held as income u/s.28(iv) or cessation of liability u/s 41(1).
