Case Law Details
Bajaj Auto Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that surplus on redemption of treasury bills is taxable under the head Capital Gains and not under the head ‘Profits and Gains of Business’.
Facts- The return of income declaring total income of 592,90,19,690/- was filed on 29.12.1999. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. The assessment u/s 143(3) of the Act was finalized on 11.03.2002 and total income was assessed at Rs.654,33,13,860/- after making various additions and disallowances of expenses. Being aggrieved, the present appeal is filed.
Conclusion- The co-ordinate bench of the ITAT in the case of the assesseee itself after following the decision of the Hon’ble Supreme Court in the case of CIT v/s Grace Collis (2001) (248 ITR 232 (SC)) that surplus on redemption of treasury bills is to be taxed under the head Capital Gains. Therefore, AO directed to assessee the same as capital gains.
Held that the assessee has made payment for the various expenses as referred above to the non-residents who were having no business connection in India, therefore, no tax was deducted for such payments. Therefore, disallowance u/s. 40(a)(i) in respect of such expenditure incurred in foreign currency unjustified.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
