The Commissioner Of Income Tax – 4, Mumbai v. M/S.sunidhi Consultancy Services Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2228 OF 2011 The Commissioner of Income Tax – 4, Mumbai Versus M/s.SUnidhi Consultancy Services Private Limited ..Appellant. ..Respondent. Mr.Vimal Gupta, Senior Advocate with Ms.Padma Divakar for the appellant.Mr.Hiro Rai with Mr.Subhash Shetty for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 19[th] March 2013 P.C. : 1.In this appeal by the Revenue for assessment year 2002-03, following questions of law have been proposed for our consideration. “a)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the disallowance made by law, the Tribunal was justified in deleting the disallowance made by the AO towards loss of Rs.40,12,968/- claimed by the assessee – company on account of sale of units in mutual fund even though the entire sequence of transactions were only on account of bonus stripping and as such were required to be treated as a fiscal nullity ?company on account of sale of units in mutual fund even though the entire sequence of transactions were only on account of bonus stripping and as such were required to be treated as a fiscal nullity ? b)Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the claim of the assessee – company of Rs.28,70,616/- as bad debts even though the conditions prescribed under Section 36(2) were not fulfilled ?law, the Tribunal was right in allowing the claim of the assessee – company of Rs.28,70,616/- as bad debts even though the conditions prescribed under Section 36(2) were not fulfilled ? itxa2228-11 c)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the claim of the assessee company towards software expenses amounting to Rs.2,16,256/- even though such expenditure was capital in nature ?” 2.In so far as question (a) is concerned, counsel for the parties state that the issue arising herein is covered in favour of the respondent – assessee and against the Revenue by the decision of the Apex Court in the matter of Commissioner of Income Tax V/s. Wallfort Share & Stock Brokers P. Limited reported in (2010) 326 ITR 1 (SC). In view of the above, we see no reason to entertain question (a). 3.In so far as question (b) is concerned, counsel for the parties state that the issue arising herein is covered in favour of the respondent – assessee and against the Revenue by the decision of this Court in the matter of Commissioner of Income Tax V/s. Shreyas S. Morakhia reported in (2012) 342 ITR 285 (Bom). In view of the above, we see no reason to entertain question (b). 4.In so far as question (c) is concerned, by the impugned order the Tribunal has restored the issue to the file of the assessing officer for fresh adjudication in light of the decision of the Special Bench of the Tribunal in the matter of Amway India Enterprises reported in 111 ITR 112 (Del.) (SB). This Court in the matter of Commissioner of Income Tax V/s. Kotak Securities Limited (No.1) reported in 346 ITR 349 had refused to entertain the Revenue's appeal in identical circumstances. Therefore, we see no reason to entertain question (c). However, all contentions are left open to be urged before the assessing officer. 5.The appeal is disposed of in the above terms with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)