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2021 (11) TMI 407 - AT - Income TaxAddition of interest expenditure - Addition being 11% (SBI lending rate) holding it to be the interest attributable to the advance made by the assessee company to its director Sri B.S.Chadha - interest as disallowed out of the interest claimed alleging that the interest was not attributable to the business requirement and the borrowed funds had been diverted for non-business purposes - HELD THAT:- As rightly pointed out by the ld. DR, the interest expenditure to the tune of ₹ 17,26,100 is not subject matter for consideration before the AO through the directions of the Tribunal. The assessee has not agitated this ground before the Tribunal in the earlier occasion. As such, there was no direction on this issue by the Tribunal so as to be taken up by the AO in the second round in the proceedings u/s. 143(3) r.w.s. 254 of the Act. Hence there is no merit in the argument of the ld. AR for the assessee that there was disallowance of the said amount by the AO in his second round of order. Accordingly, this ground of the assessee is disallowed. Undisclosed scrap sale - HELD THAT:- Tribunal remanded this issue to the AO on the reason that the assessee did not furnish any evidence to substantiate its claim that income had already been offered to tax in earlier years and it was not clear as to whether earlier record available with the AO had been considered while arriving at the conclusion that no evidence was produced by the assessee - in the remand proceedings also, the assessee failed to produce relevant evidence in respect of its claim. Even after going through the documents available with the AO in the form of part ledger account and Profit & Loss account submitted by the assessee during the assessment proceedings, it was found by the AO that only scrap sale to the extent of ₹ 31,45,974 out of total scrap sale of ₹ 57,22,227 was credited in the ledger account as scrap sale and the balance was not offered for taxation. Hence the lower authorities rightly brought to tax the balance amount of ₹ 25,76,253 which is based on material found during the course of survey and the assessee was not able to reconcile the same, even after providing opportunity of hearing before the lower authorities. Therefore, the addition is justified and this ground is dismissed. Addition of capital gain on transfer of property - HELD THAT:- Actually the CIT(Appeals) decided the issue in favour of assessee and observed that the assessee claimed the incurring expenditure as expenses towards levelling, boundary work and fencing, but failed to furnish any evidence supporting these expenses and hence upheld the disallowance. Even before us, there is no iota of evidence in support of the claim of the assessee. Hence, on this count, there is no error in the order of CIT(Appeals). Other contention of the ld. AR is that the sum of ₹ 3,30,29,479 should have been excluded from the computation of long term capital gain as it was offered as income from other sources. Admittedly, the CIT(Appeals) has given relief on this count by observing that the said amount cannot be taxed twice; once as capital gain and another as income from other sources and prima facie accepted the argument of the assessee. However, he directed the AO to take appropriate rectification action after due verification of the facts and after affording necessary opportunity to the assessee in this regard. Being so, the assessee cannot have any grievance on this count. However, we make it clear that the AO has to carry out the directions of the CIT(Appeals) in para 9.4 of his order. With these observations, this ground of the assessee is dismissed. Capital gain in respect of transfer of property to IDEB - HELD THAT:- As held in the case of Alapati Venkataramiah [1965 (3) TMI 21 - SUPREME COURT] to attract liability to tax u/s. 45, it is sufficient if in the accounting year profits have arisen out of transfer of capital asset. In other words, if the assessee had a right to receive the profit in the assessment year under consideration, the assessee is liable to pay capital gains tax on transfer of capital asset. Actual receipt of profit is not a relevant consideration. Once the profits have arisen in the accounting year out of the transfer of capital asset, it would be sufficient to attract liability u/s. 45 of the Act. The contention of the assessee is that there was no transfer in the assessment year under consideration as the possession of the property has not been given to the developer. In the present case, the assessee executed registered JDA along with registered GPA which authorizes the developer a provisional permission to enter into the land and authorizing them to develop, execute sale deed or other conveyance in respect of the impugned property and authorize to sell the constructed area of both the assessee as well as the developer. As such, there is a transfer in terms of section 45 r.w.s. 2(47) of the Act. Accordingly, we decide this ground against the assessee.
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