Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (1) TMI 756 - AT - Income TaxDisallowance of deduction u/s 48(i) - amount paid to 3 nieces towards settlement of their interest in the property - Held that:- Considering the decision of Ashok SOI vs. CIT [2004 (10) TMI 34 - DELHI High Court] for the proposition that when an assessee paid certain amounts to someone to settle the claims, who had no right, title or interest in the properties in question, they cannot be considered to have been paid wholly and exclusively in connection with the transfer of property and the amount cannot be claimed as deduction u/s 48(i) of the Act. The ratio is applicable in the instance case as the three nieces to whom the assessee had paid an amount of ₹ 15 lacs did not have any legal claim over the property and therefore, the amount paid to them cannot be said to have been made in connection with transfer of the property. The decision relied upon by the assessee in the case of CIT vs. C.V. Soundararajan [1983 (8) TMI 14 - MADRAS High Court] has no application as there is no relinquishment of any right for which the amount is claimed to have been paid. Therefore, we are of the considered opinion that the decision of CIT (A) in upholding the disallowance made by the AO does not call for any interference. - Decided against assessee. Addition made by AO u/s 69 - Held that:- As extracted from the orders of the CIT(A) and AO provide that it is the assessee’s own submission that the sum of ₹ 20 lakhs was paid in cash and the same in support of his claim of deduction u/s 54 of the Act. Agreement to sale is a valid document and the assertions of the parties relating to cash payment of ₹ 20 lakhs is true considering their signatures in the presence of the witness. We are in agreement with the views of the CIT(A)/AO and the contents of the clause relating to manner of payment have to be either correct or incorrect and they cannot be partly correct (condition (ii); and partly incorrect (condition (i) as being attempted by the assessee. Will the flat-seller sign on any agreement affirming the receipt of cash of ₹ 20 lakhs when they same is not actually received by him? In our opinion, the answer is negative. Therefore, we are of the opinion that the order of the CIT (A) on this issue needs no interference. Regarding the argument that the addition if any has to be considered only for the AY 2008-09, the same does not pertain to the year under consideration and the shall be examined as when the ground is raised in appropriate AYs. In any case, it is a settled principle that the same amount of ₹ 20 lakhs cannot be added twice in two different AYs when the flat in question is singular in number - Decided against assessee. Deduction claimed u/s 48(i) - CIT(A) allowed claim - Held that:- It is true that the three sisters of the assessee possess residuary rights in the property, which was sold by the assessee and therefore, they are entitled to the part consideration and therefore, the said payments of ₹ 45 lakhs made to three sisters at the rate of ₹ 15 lakhs each, is the expenditure wholly and exclusively in connection with the transfer of the property. Considering the above settled position in the judgment of Hon’ble jurisdictional High Court in CIT vs. Shkuntala Kantilal [1991 (3) TMI 123 - BOMBAY High Court] we are of the opinion that the order of CIT (A) does not call for any interference. Accordingly, ground no.1 raised by the Revenue is dismissed and the issue is decided in favour of the assessee. Deduction claimed u/s 54EC - investment in purchase of Capital Gain Bonds of Rural Electrification Corporation Ltd. - CIT(A) allowed claim - Held that:- As per assessee, he could not invest in REC Bonds within the stipulated period of six months because of non-availability of REC Bonds till 27.1.2007. In our opinion, assessee was prevented by a reasonable cause from purchasing the REC Bonds within six months period from the date of sale consideration by a reasonable cause of non-availability of Bonds. Therefore, we upheld the order of the CIT (A) on this issue and the decision of CIT (A) does not call for any interference - Decided in favour of the assessee.
|