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2014 (9) TMI 627 - AT - Income TaxGenuineness of expenditure Whether construction can be continued even after date of completion certificate Held that:- CIT(A) while deleting the addition has given a finding that AO has not doubted the source of payments and further the payments have been made through bank and TDS has also been deducted wherever applicable - AO has failed to appreciate that the occupancy certificate does not bar the Assessee to carry out certain works which does not allow structural changes - for disallowing the expenses - AO has to bring on record evidence to prove that the expenses were not for the business purpose or were bogus in nature, which has not been done by AO - Revenue has not brought any material on record to controvert the findings of CIT(A) the order of the CIT(A) is upheld decided against revenue. Proportionate interest expenses Whether the expenses was utilized for the business purpose or not Held that:- CIT(A) after considering the submissions of the Assessee and perusing the ledger account and the loan account has given a finding borrowed amount was used for the business purposes and therefore the interest was allowable - CIT(A) has also accepted the submission of Assessee that the deposits were carried forward from earlier years and in earlier years no disallowance on account of business purpose was made - Revenue has not brought any contrary material in its support to contradict the findings of CIT(A) the order of the CIT(A) upheld Decided against revenue. Confirmation of long term gain on sale of land - Held that:- Assessee contended that it has incurred loss on sale of land and at the same time has earned gains on the sale of building (which is a depreciable asset) - During the course of hearing a specific query was put to the assessee and he was asked about the basis of bifurcation of the value of land and building - assessee could not satisfactorily explain the basis of bifurcation and thus the basis of bifurcation appears to the arbitrary - AO has arrived at a conclusion that by adopting a most consecutive approach the annual appreciation of land was 20% on year to year basis - AO has not brought any material on record to support its conclusion - an estimated addition to cover the revenue loss due to arbitrary bifurcation in the valuation of land and building by the Assessee will meet the ends of justice the addition is restricted to ₹ 10 lacs Decided partly in favour of assessee.
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