Income Tax Appellate Tribunal - Delhi
Dcit, New Delhi vs M/S. Sabita Healthcare Pvt. Ltd., New ... on 14 March, 2018
1 ITA No. 4179/ Del/2014
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'G' NEW DELHI
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
AND
SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No. 4179/DEL/2014 ( A.Y 2010-11)
DCIT Vs Sabita Health Care Pvt. Ltd.
Circle-7(1) 10-B, K. G. Marg, Connaught
New Delhi Place
New Delhi
AAICS4602D
(APPELLANT) (RESPONDENT)
Appellant by Sh. Kaushlendra Tiwari, Sr.
DR
Respondent by Sh. Pradeep Dinodia, CA
Date of Hearing 07.03.2018
Date of Pronouncement 14.03.2018
ORDER
PER SUCHITRA KAMBLE, JM
This appeal has been filed by the Revenue against the order dated 09/05/2014 passed by CIT(A)-X, New Delhi.
2. The grounds of appeal are as under:-
1. "On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.53,40,681/-
made by the Assessing Officer on account of expenses incurred on transfer of shares."
3. The assessee filed return of income declaring income of Rs.3,53,64,791/-
2 ITA No. 4179/ Del/2014on 28.02.2013. The assessment u/s 143(3) was completed by the Assessing Officer at an income of Rs.4,08,82,560/- by making the following additions/disallowances:
(i) Disallowance of expenses on transfer Rs.53,40,681/-
(ii) Disallowance of Long Term Capital Loss brought forward in absence of evidence. Rs. 1,77,083/-
4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee.
5. The Ld. DR submitted that the CIT(A) was not correct in deleting the addition of Rs.53,40,681/- made by the Assessing Officer on account of expenses incurred on transfer of shares.
6. The Ld. AR relied upon the order of the CIT(A).
7. We have heard both the parties and perused the material available on record. The CIT(A) held as under:-
"On considering the facts of the case and perusal of the documents filed by the appellant during the appellate proceedings, it is observed that 7 shareholders of M/s Diwan Chand Medical Services Pvt. Ltd. had engaged the professional firms M/s BMR Advisors and M/s Luthra & Luthra for searching the suitable buyers of shares and execute the necessary formalities in this respect. Consequent to it the appellant company got entered into an agreement with M/s AVB Finance Pvt. Ltd. for the sale of shares during the year. In connection with such transaction only the services of M/s BMR Advisors and M/s Luthra &. Luthra Law Office were undertaken by the shareholders and expenses relating to them were proportionately claimed by the shareholders while gains on such transfer. It is observed that the appellant being one of the shareholders had sold 91,128 shares out of 3 ITA No. 4179/ Del/2014 total possession of 1,19,905 shares by M/s Diwan Chand Medical Services Pvt. Ltd. and the consequential capital gain has been shown during the year. The appellant is entitled for deduction of expenses wholly and exclusively incurred in connection with such transfer. The objections / observations made by the A.O. on the invoices raised by M/s BMR Advisors and M/s Luthra & Luthra Law Office are not based on the proper appreciation of the facts. There is no legal requirement that while the agreement of transfer between seller and purchaser should contain the names of the advisors / service providers engaged by each one of them in connection with such transfer. Similarly, it is not necessary that the invoices raised by the service provider should also mention the details of agreement to transfer of shares. Similarly, if the appellant has not made payment to the auditors who had done the valuation and for which it has explained the reasons of old friendship with the director of the company, this cannot be made a ground that claim of the appellant was wrong. It appears that the A.O. was swayed by the fact that the invoices raised by these professionals were after the end of the financial year and, therefore, the services rendered by them was not genuine. However, such presumption on the part of the A.O. is not justified in view of the series of evidences produced by the appellant before him. The appellant is entitled to claim the expenses wholly and exclusively incurred by it in connection with the transfer of shares u/s 48(1) of the Act and such claim of the appellant is irrespective of the period relatable to the year as held by the Hon'ble Court in the case of CIT vs. Rohtak Textile Mills Ltd. (supra). In view of the above, the claim of expenditure of Rs.53,40,681/- made by the appellant while computing the capital gains on transfer of shares is justified. The AO's action in disallowing such a claim is not justified and addition made by him on this account is directed to be deleted. Grounds No. l & 2 of appeal are allowed. "
Thus, the CIT(A) has given a detailed finding after discussing each and every documents/evidence. Therefore, there is no need to interfere with the order of 4 ITA No. 4179/ Del/2014 the CIT(A). The appeal of Revenue is dismissed.
8. In result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 14th March, 2018.
Sd/- Sd/-
(PRASHANT MAHARISHI) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 14/03/2018
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
5 ITA No. 4179/ Del/2014
Date
1. Draft dictated on 08/03/2018 PS
2. Draft placed before author 09/03/2018 PS
3. Draft proposed & placed before .2018 JM/AM
the second member
4. Draft discussed/approved by JM/AM
Second Member.
5. Approved Draft comes to the PS/PS
Sr.PS/PS 14.03.2018
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk 14.03.2018 PS
8. Date on which file goes to the AR
9. Date on which file goes to the
Head Clerk.
10. Date of dispatch of Order.