Pr. Commissioner of Income Tax-1 v. M/S Ansal Properties and Infrastructure Limited

1. This appeal concerns Assessment Year (AY) 2011-12.

2. Via the instant appeal, the appellant/revenue seeks to assail the order dated 16.07.2021 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”].

3 On merits, the issue that arose for consideration before the Tribunal was whether the expenditure amounting to Rs. 9,46,22,358/- incurred in connection with the issue of equity shares to Qualified Institutional Buyers (QIBs), qualifies for a deduction under Section 35D(2)(c)(iv) of the Incometax Act, 1961 [in short, “Act”].

4. The respondent/assessee had amortized the expenditure over five (5) years, by taking recourse to the provisions of Section 35D(2)(c)(iv) of the ITA No.185/2023 Income-tax Act, 1961 [in short, “the Act”].

5. In the period in issue, 1/5th of the aforementioned amount i.e., 9,46,22,358/- was claimed as an expense. In absolute terms, the amount claimed as deduction in AY 2011-12 by the respondent/assessee was Rs. 1,89,24,471/-.

6. The appellant/revenue also sought to deny the deduction to the respondent/assessee on the ground that the issue of shares to QIB was not a “public subscription”.

7. Given the fact that in the period in issue i.e., AY 2011-12, the expense claimed was only Rs.1,89,24,472/-, in our opinion, the tax effect would be less than the prescribed threshold i.e., Rs. 1 crore.

8. Given this position, the appeal is closed with liberty to the appellant/revenue to approach the court, for revival of the appeal, if they receive instructions to the contrary. 8.[1] We have noteed this aspect Mr Sanjay Kumar, learned senior standing counsel, has been unable to obtain instructions from the concerned Assessment Officer (AO) despite the opportunity.

RAJIV SHAKDHER, J GIRISH KATHPALIA, J DECEMBER 7, 2023 / tr