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2012 (10) TMI 851 - AT - Income TaxDisallowance of renovation property expenditure - Held that:- Earlier sale deal was fixed with Smt. Kavita Agarwal vide agreement dated 16.8.2002 for a consideration of Rs.80 lakhs and sum of Rs.25 lakhs was said to have been received which was alleged to have been refunded on 24.10.2002 due to the fact that the deal could not be materialized. Then again the same property was sold to Shri Amit Sibal for a sum of Rs.1,01,00,000/- but the assessee has claimed to have incurred an expenditure of Rs.52,60,758/- to remove certain defects in the construction and therefore in fact the building was sold for a net consideration of Rs.48.31 lakhs as against the earlier agreement with Smt. Kavita Agarwal for Rs.80 lakhs. It is not understood as to what prudence the assessee had used at the first place by refunding the amount of Rs.25 lakhs received from Smt. Kavita Agarwal without forfeiting which always remains as the standard condition in any agreement to sell and then by agreeing to sell the same to another buyer after a period of about five months at a much lower net consideration after considering the alleged claim of expenses. This situation does not arise in reality and is against the normal human behavior. The assessee did not submit the original invoices of construction alleged to have been done on the property. It had submitted only photo copy of invoices and most of the invoices were in the name of Nahar Theatre Pvt. Ltd. and name of the assessee was written after cutting the name of Nahar Theatre Pvt. Ltd - From the details of invoices as placed it is apparent that major amount was alleged to have been spent between 7.4.2002 to 23.10.2002. Therefore, how it can be claimed that alteration/addition/renovations were done at the direction of ultimate buyer Shri Amit Sibal because agreement to sell could only be entered into with him after termination of first agreement of dated 16.,8.2002 which was said to have been terminated on 24.10.2002. Therefore, it emerges from the above that most of the expenses related to the period before entering into agreement to sell with Shri Amit Sibal which ultimately implies that expenses incurred before agreement with Shri Amit Sibal cannot be said to have been incurred at his behest - against assessee. Disallowance of Festival expenses - Held that:- As assessee had only one property, the disallowance of Rs.50,000/- out of total festival expenses of Rs.2 lakhs was justified.
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