Calculation of long term capital asset on the basis of indexation of cost

IN THE INCOME TAX APPELLATE TRIBUNAL
 “C” BENCH, CHENNAI

BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND
SHRI S. JAYARAMAN, ACCOUNTANT MEMBER

I.T.A. No: 960/Chny/2018
Assessment Year : 2003-04

India Meters Ltd.,
(Now Known as Samrakhshana Electricals
Ltd.)
No. 22A, Ambattur Industrial Estate,
Ambattur,
Chennai – 600 058.
[PAN: AAACI 6509F]
Appellant) 

Vs. 

Assistant Commissioner of Income
Tax,
Company Circle II(3),
(Now ITO, Corporate Ward 2(1),
Chennai.
Respondent)

Appellant by : Shri. T.N. Seetharaman, Advocate
Respondent by : Shri. Suresh Periasamy, JCIT

Date of Hearing : 14.06.2021
Date of Pronouncement : 21.06.2021

 O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)- 13, Chennai in ITA No. 01/CIT(A)-13/AY 2003-04 dated 01.12.2017 for the assessment year 2003-04. 

2. The assessee filed this appeal 9 days belatedly. The Ld. AR submitted that the director who was on official tour and hence there was delay in getting the appeal papers signed, therefore, the short delay being bonafide be condoned and the appeal be decided on merits.

3. We heard the rival contentions and condone the delay.

4. M/s. India Meter Ltd., the assessee, a manufacturer of energy meters and auto component parts, filed its return of income for assessment year 2003-04 admitting the business loss of Rs. 10,65,62,368/- and capital loss of Rs. 94,96,400/-. While making the assessment u/s. 143(3), the AO disallowed written off expenditure claimed at Rs. 78,54,918/- on the ground that such expenditure is related to earlier years and it did not pertain to the assessee. Further, the AO disallowed the capital loss claimed at Rs. 30,11,169/- on sale of shares stating that the assessee could not substantiate the claim and justify as towhy the shares were sold at cost price. Similarly, another loss on sale of shares at Rs. 2 crores was also disallowed for want of details and relevant documents. Aggrieved, the assessee filed an appeal before the CIT(A). During the appeal proceedings, the assessee filed certain documents in support of its claim. The Ld. CIT(A) obtained remand report from the Assessing Officer and after considering the rebuttal furnished by the assessee on the remand report etc, the Ld. CIT(A) dismissed the appeal. Aggrieved against that order, the assessee filed  this appeal with the following grounds of appeal: 

“1. The order of the Commissioner of Income Tax (Appeals) is against the facts and circumstances of the case and is bad in law.

2. The Commissioner (Appeals) erred in not taking proper note of the Grounds of Appeal, “Brief Notes and Supporting Documents” dated 29.05.07 and the appellant’s rejoinder (dated 27.11:2017) to the AC’s remand report on the issues involved and dismissing the appeal.

3. The Commissioner (Appeals) erred in confirming the disallowance ofRs.78,54,918/- being expenditure towards salaries, travelling etc incurred on behalf of and apportioned to two other Group Companies and later absorbed by the appellant due to their refusal to respond the hereby recognised as expenditure of this year; the reasons stated by the Commissioner (Appeals) in this regard are incorrect and unsustainable.

4. The Commissioner (Appeals) erred in confirming the disallowance of Rs. 13,11,169/- representing Long Term Capital Loss arising on sale of shares of Bharat Technologies Auto Components Ltd at Indexed Cost.

5. The Commissioner (Appeals) erred in not noting that the shares were sold at Book Value and the loss arose only on account of indexation of the cost and is properly allowable. 

To know more in details find the attachment file