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Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M.
This is an appeal filed by the assessee against the order of the Id CIT(A)- XII, new Delhi dated 03.09.2016 for AY 2010-11 raising following grounds of appeal:- “1 Ground of Appeal No. 1 : Disallowance u/s 40(a)(ia) on the management fees and Licence fees Rs.1.98.615/- i) That the Ld.CIT(A) has erred in law and facts in confirming the addition of Rs.1,98,615/- out of management fees and licence fees u/s 40(a)(ia) of the Income Tax Act on account of lesser deduction of TDS by the assessee which was deducted @20% instead of 20.6% (TDS 20% plus Surcharge 3% on TDS) without considering the facts of the case and the legal provisions under the Income Tax Act. ii) The Ld. CIT(A) has also erred in law and facts of the case while giving finding that the assessee case does not fall under section 201(1 A) and falls only under section 40(a)(ia) of the Income Tax Act.
Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) iii) The Ld. CIT(A) has also erred in law and facts while disregarding the case laws relied upon by the assessee and disallowing the expenditure of Rs. 1,98,615/- u/s 40a(ia) of the Income Tax Act. 2. Ground of Appeal
No. 2 : Depreciation on leasehold improvement Rs.79.59.039/- i) That the Ld. CIT(A) has erred in law and facts while confirming the addition of Rs.79.59,039/- for depreciation which was debited by the assessee in the Profit and loss account under the Companies Act ignoring the depreciation chart filed by the assessee claiming depreciation of Rs. 26,25,414/- under Income Tax Act and ignoring the rectification orders u/s 154/143(3) dated 23.08.2013 passed by the Ld. A.O. ii) The Ld. CIT(A) has also erred in law and facts while upholding the findings of the Ld. A.O. that the assessee has not carried out any renovation within the meaning of explanation 1 to section 32(1) of the Act which allows the depreciation on the capital expenditure incurred for the purpose of the business on the building not owned by them. iii) The Ld.CIT(A) has erred in law and facts while upholding the contention of the Ld. A.O. that the expenditure on leasehold asset incurred by the assessee neither falls within the meaning of building nor future & fitting for the purpose of allowing depreciation on the renovation work carried on by the assessee on the leasehold premises.”
2. The assessee During the course of hearing also submitted an application of admission of additional ground of appeal as under:- "The present petition is being submitted before Your Honor's under Rule 11 of the Income tax Appellate Tribunal Rules, 1963 for admission of th under noted purely legal grounds of appeal:
1. The AO has erred in holding and the CIT (A) has erred in confirming that in the case of loan taken for acquiring capital assets (not for trading), its waiver thereof would amount to income exigible to tax under the Act, even though the same may have been credited to the profit and loss account (in the current or subsequent year ) and hence the impugned addition of Rs. 1,00,00,000 on account of cessation of liability is void ab-initio, contrary in law and liable to be quashed.
2. Without prejudice to 1 above, the AO has erred in adding and the CIT(A) has erred in confirming impugned addition of Rs. Page | 2 Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) 1,00,00,000 on account of cessation of liability in the period prior to its cessation and hence the impugned addition is void ab-initio, contrary to law and liable to be quashed in the current assessment year. "
3. The brief facts of the case show that assessee is a company operating food joint and restaurant. It filed its return of income on 15.10.2010 declaring a loss of Rs. 12444766/-. The assessment order u/s 143(3) of the Act was passed by DCIT-9(1), New Delhi on 05.03.213 making following additions:- a. Disallowance of Rs. 198615/- of management fees for non deduction of tax at source b. Disallowance of depreciation on lease hold improvement of Rs. 7959039/- c. Addition because of cessation of liability of Rs. 1 crore u/s 28(iv) of the Act.
4. The assessee preferred appeal before the Id CIT (A) contesting all these additions. The Id CIT (A) dismissed the same vide order dated 03.09.2014 therefore, assessee is in appeal before us.
5. The additional ground raised
before us as submitted that is purely legal in nature and does not require any fresh verification of facts. It is further stated that it goes to the root of the matter and challenges the basic taxability of the amount in question. Therefore, assessee submitted that it should be admitted.
6. The Id Departmental Representative vehemently objected and submitted that the additional ground may not be admitted.
7. We have carefully considered the rival contentions and find that in the additional ground the assessee has challenged the addition confirmed by the Id CIT (A) of the sum of Rs. 1 crore u/s 28(iv) of the Income Tax Act. The issue has been adjudicated by the Id CIT (A) vide para No. 4 of her order. It is not a new issue but it seems that assessee forgot to raise the Page | 3 Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) above ground of appeal in the original appeal memo. In view of this, we admit the additional ground of appeal of the assessee.
8. Coming to the first ground of appeal regarding disallowance of management fees and license fees of Rs. 1968615/- for non deduction of tax, the brief facts shows that assessee has made payment of management fees and license fees of Rs. 3905169/- and Rs. 2715340/- respectively to SSP Financing UK Ltd. the assessee deducted tax thereon, however, applicable surcharge thereon was not deducted. The assessee submitted that assessee by mistake has not applied the surcharge thereon but has deducted full tax. The assessee also relied on the decision of the coordinate bench wherein it has been held that disallowance u/s 40a(ia) cannot be made for lesser deduction of tax at source. However, the Id Assessing Officer disallowed a sum of Rs. 198615/- being proportionate sum.
9. The assessee on appeal before the Id CIT (A) reiterated the same facts, however, the Id CIT (A) confirmed the finding of the Id AO.
10. The IdAR vehemently submitted that tax deduction at source on payment made to the payee is covered u/s 195 of the Act and surcharge is not applicable on payment made u/s 195 of the Act. he further stated that issue is squarely covered in favour of the assessee by the decision of Kolkata Bench of ITAT in SK Tekriwal (2011) 48 SOT 515. He further relied on the decision of various tribunals. He further submitted that the company has not paid aforesaid amount of the management fees to SSP because of the waiver letter dated 7/8/2014 and the above provision has been reversed in the books of accounts of the assessee in the financial year 2014 -
15. To this effect, the assessee submitted a certificate of CA dated 13/10/2017 also. Therefore the main contention of the assessee was that the above fees has not been paid to the party but has been reversed in the subsequent year and therefore no tax would have been deducted thereon. In fact assessee has deducted tax at source but has failed to deduct the surcharge thereon only. In view of this Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) it was submitted that the disallowance made by the Ld. assessing officer may be deleted.
11. The Id DR vehemently submitted that to proper tax at source has not been made by the assessee then, disallowance has been correctly made by the lower authorities.
We have carefully considered the rival contentions and also perused the orders of the lower authorities. In the present case the assessee has paid sums to a foreign party and tax was required to be deducted u/s 195 of the Income Tax Act. The assessee deducted tax at the rate specified in the income tax act however failed to increase the rate of tax by the rate of surcharge thereon. Hence, the Ld. assessing officer disallowed the proportionate amount of expenditure to the amount of surcharge. The Ld.CIT (A) confirmed the above disallowance. Coordinate bench in case of s. k. Tekriwal has considered an issue that if the taxes deducted under one section and according to revenue it is required to be deducted under other section may be higher rate of tax is prescribed, and' the assessee was under a bona fide belief that tax is properly deducted then disallowance under section 40 (a) (ia) of the cannot be made. The provisions of section 40 (a) (ia) of Pari materia is similar to the provisions of section 40a (i) of the act. The coordinate bench held as under:- " In the present case before us the assessee has deducted tax u/s. 194C(2) of the Act being payments made to sub-contractors and it is not a case of non-deduction of tax or no deduction of tax as is the import of section 40a(ia) of the Act. But the revenue's contention is that the payments are in the nature of machinery hire charges falling under the head 'rent' and the previous provisions of section 1941 of the Act are applicable. According to revenue, the assessee has deducted tax @ 1% u/s. 194C(2) of the Act as against the actual deduction to be made at 10% u/s. 1941 of the Act, thereby lesser deduction of tax. The revenue has made out a case of lesser deduction of tax and that also under different head and accordingly disallowed the payments proportionately by invoking the provisions of section 40(a)(ia) of the Act. The Ld. CIT, DR also argued that there is no word like failure used in section 40(a)(ia) of Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) the Act and it referred to only non-deduction of tax and disallowance of such payments. According to him, it does not refer to genuineness of the payment or otherwise but addition u/s. 40(a)(ia) can be made even though payments are genuine but tax is not deducted as required u/s.40(a)(ia) of the Act. We are of the view that the conditions laid down u/s.40(a)(ia) of the Act for making addition is that tax is deductible at source and such tax has not been deducted. If both the conditions are satisfied then such payment can be disallowed u/s. 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bonafide wrong impression, under wrong provisions of TDS, the provisions of section 40(a)(ia) of the Act cannot be invoked. Here in the present case before us, the assessee has deducted tax u/s. 194C(2) of the Act and not u/s. 1941 of the Act and there is no allegation that this TDS is not deposited with the Government account. We are of the view that the provisions of section 40(a)(ia) of the Act has two limbs one is where, inter alia, assessee has to deduct tax and the second where after deducting tax, inter alia,'the assessee has to pay into Government Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, 'on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section (1) of section 139'. This section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s. 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act. Accordingly, we confirm the order of CIT (A) allowing the claim of assessee and this issue of revenue's appeal is dismissed." The Hon'ble Calcutta High Court affirmed the above decision in dated 3rd of December 2012. The Hon'ble high court affirmed that there is nothing in the provisions of section 40 (a) (ia) which provides for disallowance of the expenditure for short deduction of tax. We also do not find any such provision in section related to disallowance of deduction of expenditure made outside India or to a non-resident. In view of this respectfully following the decision of Hon’ble High Court Page | 6 Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) we direct the Ld. assessing officer to delete the disallowance of above Rs 198615/- of expenses on account of management and license fees paid by the assessee. In the result ground No. 1 of the appeal is allowed. 2nd ground of appeal
relates to depreciation on improvement of lease 13. hold assets of Rs. 7 959039/- disallowed by the Ld. assessing officer and confirmed by the Ld. CIT (A). During the year assessee has incurred expenditure on the leasehold premises for setting up of the food courts and kitchen units and staff office by making civil constructions partitions , renovations, plumbing, flooring, false ceiling, lamination and lighting panels. The expenses also included construction and sewage connections for setting up of food courts and kitchen. The Ld. assessing officer disallowed a sum of Rs. 7 959039/- which was debited by the assessee in the profit and loss account. The assessing officer stated that the above expenditure neither falls within the meaning of building or furniture and fittings hence depreciation is not allowable to the assessee. The Ld. CIT (A) confirmed the disallowance.
14. The Ld. authorised representative referred to be written submission made by him before the Ld. CIT (A). He submitted that the Ld. assessing officer has made the disallowance of Rs. 7959039/- on wrong understanding of the law and facts. According to him the Ld. AO has disallowed the above amount of depreciation which was debited by the assessee in the profit and loss account as per the provisions of the companies act. He stated that the Ld. AO has ignored the fact that the above amount of depreciation had already been disallowed by the assessee in computation of taxable income and further claimed depreciation under the income tax act at the rate of 10% on Rs. 2625414/-. He further referred to the explanation 1 to section 32 (1) in stated that when the premises of the assessee is old then any capital expenditure incurred by the assessee is subject to depreciation as if the same structure or work is a building owned by the assessee. He referred to the various details of leasehold improvements made on the leasehold assets in the copy of the Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) depreciation chart. In view of the above facts he stated that the disallowance of the depreciation of Rs. 7 959039/- made by the Ld. assessing officer is incorrect. Even otherwise he referred to the order under section 154 of the income tax act passed by the Ld. AO on 23/8/2013 wherein he has corrected his mistake and reduced the excess depreciation disallowed of Rs. 5333625/. Therefore he submitted that in nutshell the Ld. AO has disallowed the depreciation of Rs. 2 625414/-.
The Ld. departmental representative vehemently supported the orders of the lower authorities and submitted that when the assessee could not show that what kind of capital expenditure the assessee is incurred then the depreciation thereon cannot be allowed. He specifically referred to para No. 4.2 of the order of the Ld. assessing officer wherein it has been stated that the expenditure incurred by the assessee did not fall within the meaning of building furniture and fittings.
We have carefully considered the rival contention and perused the orders of the lower authorities. In fact after the order u/s 154 of the act passed by the Ld. assessing officer the exact amount of depreciation disallowed by the Ld. AO does not remain Rs. 7959039 but only Rs. 2625414. The above depreciation has been claimed by the assessee on account of various capitalisation made by the assessee being in the nature of improvement made to the leasehold assets. The respective details of those expenditure are available at page No. 23 - 27 of the paper book. For assessment year 2009 - 10 the total amount of expenditure incurred by the assessee is Rs. 193,31,630 and for assessment year 2010 - 11 the total expenditure incurred by the assessee is Rs. 14347583/- . On the above amount of expenditure the assessee has claimed depreciation at the rate of 10%. On looking at the details of the expenditure, it is apparent that the above addition has been made by the assessee to the building and the claim of depreciation is at the rate of 10% of the expenditure. The expenditure are in the nature of plumbing work, and grail, building words such as partition, flowing entice, main panel and Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) distribution board, fancy lighting etc. From the above details furnished by the assessee before the lower authorities, it is apparent that the assessee has made improvement in the leased property which is used by the assessee for the purposes of the business. Naturally, the addition has been made to the building and also part of the furniture and electrical fittings. Even otherwise the assessee has claimed depreciation for the income tax purposes only at the rate of 10% which is less than the depreciation for machinery and plant and equivalent to the depreciation rate for the furniture and fittings. Further the explanation 1 added to section 32 with effect from 1/4/1988 which provides that whether the business or profession of the assessee is carried on in the building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business on the construction of any structure or doing any work in on in relation to and by way of renovation or extension of improvement to the building , then the provisions of this clause shall apply as if the said structural work is building owned by the assessee. Therefore according to that even the expenditure incurred by the assessee on the leasehold premises will also satisfy the ownership test. Furthermore the asset is also used by the assessee for the purposes of the business satisfying the user test, the depreciation thereon cannot be disallowed. In view of the above facts we direct the Ld. assessing officer to delete disallowance of depreciation on various expenditure incurred for of the business which are capital expenditure in nature and qualifies as building and furniture and fixture amounting to Rs. 2625414/-. Accordingly, we reverse the finding of the Ld. CIT (A) and allow ground No. 2 of the appeal of the assessee.
Ground No. 3 of the appeal of the assessee is pertaining to addition made by the Ld. assessing officer under section 28(iv) of the income tax act on account of cessation of ability of Rs. one crore loan received from SSP Cypus. The assessee has received a loan of Rs. One crore during the Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) assessment year from SSP catering Cyprus Ltd through normal banking channel. However the outstanding liability at the end of the assessment year under reference was only Rs. 89.19 Lacs which is appearing in the balance sheet under the head unsecured loan. The difference in the amount of loan and the amount outstanding at the end of the year was on account of exchange fluctuation. During the assessment proceedings the assessee explained the fact to the Ld. assessing officer that the loan of Euro 147275 is payable to the above company and the assessee has also applied to Reserve Bank Of India for the approval which is pending as on date. It was stated that the said loan would be paid to the above company on receipt of approval from Reserve Bank Of India. However the learned assessing officer made the addition of Rs. one crore under section 28 (iv) of The Income Tax Act. It was explained by the ,assessee that FIRC would not be received by the assessee because of some technicalities. The assessee submitted the complete correspondence with respect to above loan. The Ld. assessing officer stated that the loan is still outstanding as on the date and necessary approval of the reserve bank of India has not been received. As the money has not been returned back by the assessee till date , the only plausible explanation offered by the assessee is the payment at "earliest juncture" the Ld. assessing officer held that the said amount is includible in the income of the assessee under section 28 (iv) of The Income Tax Act 1961. The assessee contested the above addition before the Ld. CIT (A) unsuccessfully.
The Ld. authorized representative reiterated the submissions made by it before the Ld. CIT (A). It was stated that the assessee has filed the copy of the conformation from the above party and copy of the external commercial bank loan agreement along with the above copy along with the invoices for recovery of monthly interest. Form No. 83 filed with the reserve bank of India for intimation of loan agreement details were also filed by the assessee.Therefore, it was submitted that that the loan of Rs.
Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) One crore taken by the assessee is actually payable by the assessee to the above party and the liability of this loan is neither ceased nor written back to the profit and loss account , therefore the above amount could not have been assessed as income under section 28 (iv) of the act. He further stated that it is receipt of money and not any benefit etc. It was therefore submitted that Ld. assessing officer has incorrectly applied the provisions of the law. The assessee further relied upon the decision of Mahindra and Mahindra Ltd versus CIT 261 ITR 501 (mum). The assessee further relied on the decision of JSW steel Ltd versus ACIT 923/bang/2009 for assessment year 2004 - 05. He further referred to the loan agreement waiver letter dated 07/08/2014 wherein the above loan amount was waived by the end. It was therefore submitted that the loan amount has been waived in assessment year 2015 - 16.
Ld. departmental representative vehemently supported the order of the lower authorities and submitted that when the loan amount has been received by the assessee and is not repaid and ultimately when it is way of it supports the order of the Ld. assessing officer'that same is chargeable to tax under section 28 (iv) of the act. He submitted that the assessee has received a value of benefit arising from the business of exercises of the profession and therefore same is chargeable to tax as business income of the assessee.
We have carefully considered the rival contentions and also the orders of the lower authorities. The fact remains here that the assessee has received a loan of Rs. one crore from one entity from Cyprus. The above amount of loan was received by an agreement dated 14th of July 2009. At the purpose of the loan was for the expansion of the business of the assessee in payment of various security deposits, incurring capital expenditure in respect of the designing and development of the food court at the domestic Security hold area of terminal 3 of Indira Gandhi International airport licensed to the assessee as a select bidder. The principal amount of loan was Euro 147275.41 and interest was payable Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) on that loan Euro Libor +2.5%. To support the above loan the assessee the above party and the liability of this loan is neither ceased nor written back to the profit and loss account , therefore the above amount could not have been assessed as income under section 28 (iv) of the act. He further stated that it is receipt of money and not any benefit etc. It was therefore submitted that Ld. assessing officer has incorrectly applied the provisions of the law. The assessee further relied upon the decision of Mahindra and Mahindra Ltd versus CIT 261 ITR 501 (mum). The assessee further relied on the decision of JSW steel Ltd versus ACIT 923/bang/2009 for assessment year 2004 - 05. He further referred to the loan agreement waiver letter dated 07/08/2014 wherein the above loan amount was waived by the end. It was therefore submitted that the loan amount has been waived in assessment year 2015 - 16.
Ld. departmental representative vehemently supported the order of the lower authorities and submitted that when the loan amount has been received by the assessee and is not repaid and ultimately when it is way of it supports the order of the Ld. assessing officer That same is chargeable to tax under section 28 (iv) of the act. He submitted that the assessee has received a value of benefit arising from the business of exercises of the profession and therefore same is chargeable to tax as business income of the assessee.
We have carefully considered the rival contentions and also the orders of the lower authorities. The fact remains here that the assessee has received a loan of Rs. one crore from one entity from Cyprus. The above amount of loan was received by an agreement dated 14th of July 2009. At the purpose of the loan was for the expansion of the business of the assessee in payment of various security deposits, incurring capital expenditure in respect of the designing and development of the food court at the domestic Security hold area of terminal 3 of Indira Gandhi International airport licensed to the assessee as a select bidder. The principal amount of loan was Euro 147275.41 and interest was payable Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) on that loan Euro Libor +2.5%. To support the above loan the assessee submitted the confirmation letter, loan agreement, form No. 83 filed with the reserve bank of India, the correspondence for obtaining the foreign inward remittance certificates etc. The Ld. assessing officer made the addition under section 28 (iv) of the act of the above loan amount as it has not been repaid by the assessee to the other party. According to the provisions of section 28 (iv) if the assessee receives any benefit perquisite then the value of such benefit whether convertible into money or not is chargeable to tax as business income under section 28 if it arises from the business or exercise of profession. A plain reading of section 28(iv) would reveal that the income which has been set out in the clauses shall be chargeable to income tax under the head 'profits and gains of business or profession'. Clause (iv) deals with the vglue of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. The Hon Delhi High Court, in Logitronics (P.) Ltd. v. CIT [2011] 333 ITR 386/197 Taxman 394/9 taxmann.com 302 and Rollatainers Ltd. v. CIT [2011] 339 ITR 54/15 taxmann.com 111 (Delhi), followed the decision of Hon Madras High Court in Iskraemeco Regent Ltd. and expounded the law that if a loan had been taken for acquiring a capital asset, waiver thereof would not amount to any income exigible to tax. If the loan is taken for trading purposes and was also treated as such from the beginning in the books of account, the waiver thereof may result in the income, more so when it is transferred to the profit and loss account. Therefore, it is not the actual receipt of money, but the receipt of a benefit or perquisite, which has a monetary value, whether such benefit or perquisite is convertible into money or not, which is what is covered by section 28(iv). However the loan has been received by the assessee on 14/07/2009. According to the above agreement repayment date was 13/07/2012. Therefore in the assessment year 2010 - 11 the assessee has a liability to pay to the above party. It is a capital borrowed by the assessee in the form of loan Skylark Hospitality India (P) Ltd, Vs. Dy. CIT, (Assessment Year: 2010-11) from those parties on which interest is also payable. The above amount has not been credited to the profit and loss account also. It is correct that ultimately the amount of loan was waived by the lender but that happened on 7th of August 2014 falling into the assessment year 2015 - 16 and not the present assessment year. Therefore the transactions entered into by the assessee for these assessment year is precisely the transaction of the loan on interest from the foreign party. Even otherwise, the Ld. assessing officer could not show that what benefit the assessee has obtained which is arising out of the business of the assessee by obtaining loan on interest. It is not also the claim of the revenue that the rate of interest of the agreement is not at commercial rates. Further the Hon'ble Supreme Court recently in the case of the CIT versus Mahindra and Mahindra Ltd in civil appeal numbers 6949 - 6950/ 2004 dated 24/4/2018 in para No. 13 has held as under:-
13) On a plain reading of Section 28 (iv) of the IT Act, prima facie, it appears that for the applicability of the said provision, the income which can be taxed shall arise from the business or profession. Also, in order to invoke the provision of Section 28 (iv) of the IT Act, the benefit which is received has to be in some other form rather than in the shape of money. In the present case, it is a matter of record that the amount of Rs. 57,74,064/- is having received as cash receipt due to the waiver of loan. Therefore, the very first condition of Section 28 (iv) of the IT Act which says any benefit or perquisite arising from the business shall be in the form of benefit or perquisite other than in the shape of money, is not satisfied in the present case. Hence, in our view, in no circumstances, it can be said that the amount of Rs 57,74,064/- can be taxed under the provisions of Section 28 (iv) of the IT Act.
In view of above facts now the issue in this ground of appeal is squarely covered by the decision of the Hon'ble Supreme Court in favour of the assessee . Therefore we allow additional ground raised by the assessee and direct the assessing officer to delete the addition of Rs. one crore made by him under section 28(iv) of the act. In the result we reverse the order of the Ld. CIT (A) and allow the additional ground of the assessee.