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2017 (10) TMI 997 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - Held that:- Since the money in question remanded with the assessee only for one day and was returned to GCP without any utilisation it cannot be treated as advance or loan within the meaning of section 2(22)(e) and came to the aforesaid conclusion. CIT(A) placed reliance on the decision of ITAT Mumbai Bench in the case of Praveen Bhimshi Chheda Shiv Sadan vs DCIT (2011 (5) TMI 857 - ITAT MUMBAI) wherein it was held that the provision of section 2(22)(e) of the Act cannot be attracted where the transaction was circuitous transaction and the money which initially belonged to the company was returned to it on the very same day. The Tribunal held that looking at the transactions from the objects of section 2(22)(e) of the Act it cannot be said that there was diversion of dividend in the form of loans or advances. CIT(A) accordingly deleted the addition made by AO. Disallowance of exemption under section 54 - Held that:- The assessee claimed deduction during the year. It was contended that since the assessee has not been able to purchase the new property within the specified period, he has declared this capital gain in the next assessment year. In this regard, attention was invited which is computation of income for the subsequent year. As per the assessee has declared the capital gain on this property in a subsequent year 2012-13. We are of the view that the issue needs to be set aside to the file of the AO with the directions that he shall verify the return for the next assessment year. In case the capital declared in the subsequent year, then the said capital gain need to be deleted. Accordingly, the AO is directed to verify the claim of the assessee. In case the AO is of the view that the capital gain is chargeable to tax in the year under consideration, then he shall delete the income in the subsequent assessment year 2012-13, as we are of the view that the same income cannot be taxed twice. Disallowance of an amount being brokerage and legal expenses paid while computing capital gain on the sale of property bearing No. B-7, Sector-72 - Held that:- We note that the AO had disallowed this expenditure on the ground that assessee has not filed the details. This is factually incorrect. A sum of ₹ 2,26,750/- was paid to Noida Authority as one time lease charges at the time of purchase of the Plot. The evidence of the same was submitted placed at PB. Pg. 99 along with the bank statement at page 101 whereby a sum of ₹ 113375/- (being 50% share. of the assessee of ₹ 226750) is the debit appearing. Thus, the same being cost of acquisition it was rightly deducted while computing capital gain. Before the AO assessee submitted the ledger Account (PB Pg.99) of the property showing the amount of expenses paid to Noida Authority and the same was co-related with the bank statement at PB Pg. 101 where in PO is made on 30.6.2010 for making payment to Noida Authority. In our view the Ld. CIT(A) has gone wrong ignoring these evidences and confirming the disallowance made by the AO, hence, the addition in dispute is deleted. Disallowance of deduction being the expenditure incurred by the assessee in respect of property bearing No. S-143, Greater Kailash, Part-II, New Delhi - Held that:- This amount was incurred by the assessee on this property after the purchase. In our view the same is to be included in the cost while computing the capital gain. The AO has disallowed the same and the Ld. CIT(A) has confirmed the disallowance ignoring the explanation and evidences submitted by the assessee in support thereof. Since the assessee having incurred the expenditure the same ought to have been allowed while computing cost of the assets sold, hence, the addition in dispute is deleted. Disallowance being the expenditure incurred on legal and brokerage at the time of sale of the above property - Held that:- As per the provision of the Section 48, the capital gain is to be computed after deducting from the actual consideration received, the expenditure incurred in connection with such sales. The assessee having incurred these expenses the AO and Ld. CIT(A) have gone wrong in disallowing the same, hence, the addition in dispute is deleted.
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