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2012 (12) TMI 254 - AT - Income TaxDis allowance of Brokerage Expenses - Deduction u/s 22 while computing annual value of Property u/s 24 - held that:- in computing the income from house property only deduction as permissible u/s 24 of the Act are to be considered and no deduction is allowable therein for payment of brokerage charges - Decided in favor of revenue. Disallowance of business loss - held that:- facts on record as per the audited financial statements of the assessee for the relevant period, clearly established with irrefutable evidence that the assessee had commenced its real estate business operations in the relevant period and the expenses incurred for salaries, wages, brokerage, professional fees, rent, registration fees, audit fees, bank charges, etc were genuinely incurred for the bona fide conduct of business operations - expenditure incurred by the assessee, as debited in its profit and loss account and the Schedule’s thereto, have been incurred in the normal course of business operations and the resultant business loss of Rs.16,18,288 is to be allowed. The assessee's ground on this issue is allowed. Re-computation of capital gains on transfer of land - AO rejected computation of capital gain as per sale deed - make reference to DVO for fair market valuation of the said land u/s 55A r.w.s.sec 16A of Wealth Tax Act,1957 - assessee do not object to vauation as per DVO report - AO, instead of adopting the valuation of land as per the DVO’s report, recomputed capital gains by making a mark up of 40% on sale consideration of Rs.1,46,47,100(as per DVO), as per the Journal Publication of Estimated Market Value of Immovable Properties & Buildings for Registration Bangalore (Urban) District as it was a commercial property - held that:- Action of AO to add a sum of Rs.58,58,840 to the valuation of the said land as per DVO’s report on account of 40% for commercial property and then proceeded to compute the capital gains was without any basis on facts or the provisions of law and argued that the capital gains ought to computed as done by the assessee and adopting the estimated value of the land at Rs.1,46,47,090 as per the DVO’s report - This action of AO and CIT(A)’s sustenance of this are, in our considered opinion, erroneous and contrary to the requirements laid down in the provisions of section 55A of the Act r.w.s. 16A(6) of the Wealth Tax Act, 1957 - direct the AO to recompute the capital gains arising to the assessee on account of sale of the said land to M/s. Bagadia Estate Developers Pvt Ltd taking the sale price of the property at Rs.1,46,47,090 as estimated by the DVO in his report dt.24.12.2010. It is ordered accordingly.
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