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2012 (7) TMI 332 - AT - Income TaxDisallowance u/s 36(1)(iii) based on the provisions of Sec. 40A(2)(a) of the Act - Interest on loans - held that:- The addition was made by the ld. Assessing Officer merely on the premises that lower rate of interest was charged by the assessee from its two relatives and jumped to the conclusion that the assessee made excessive payment. The CBDT in circular no. 6P dated 6.7.1968, while examining the reasonableness of expenditure, has clarified that the Assessing Officer is expected to exercise its judgment in a reasonable and fair manner and should not apply the reasonableness which cause hardship in bona fide cases. - So far as establishing business exigencies are concerned, it has to be judged by the businessman and not by the Revenue unless and until some adverse material is brought on record - Decided in favor of assessee. Long term capital gain on the sale of the house – sale deed for a consideration of Rs.30 lakhs - stamp valuation authority determined the value at Rs.35,71,000/- for the purposes of stamp duty levy - fair market value of the house was determined at Rs.36,52,000 - assessee has challenged the valuation – Held that:- Valuation adopted, approved by the DVO is based upon detailed working and the value of the house as on 1.4.1981 including the cost of the land/cost of the construction. There are very minor variations in the approach of the authorities - no infirmity in the direction of the learned Commissioner of Income Tax (Appeals) to recalculate the long term capital gain by taking the sale consideration at Rs.35.71 lakhs by adopting the cost of the house as on 1.4.1981 at Rs.5.11 lakhs as determined by the DVO Disallowance on account of bad debts - disallowed on the plea that identically in earlier assessment year also, the bad debt was disallowed – Held that:- Relief was given to the assessee and for the remaining amount of Rs.9,52,500/- in respect of fixed deposits and recurring deposits with Gujarat Mercantile Bank are concerned, these can be considered as capital loss, therefore, the Assessing Officer is directed to examine the claim of the assessee, consequently, the amount to the extent of Rs.9,52,500/- is remanded back for consideration of the ld. Assessing Officer for which due opportunity of being heard be provided to the assessee - appeals filed by the revenue are dismissed
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