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2013 (9) TMI 799 - AT - Income TaxYear in which addition u/s 69C of the Income tax act be made – Addition u/s 69C be made on account of unexplained expenditure - Addition in the cost of land of Rs.1,32,65,000/- based on the entries made in the impounded document - The explanation of the assessee that it was a hypothetical amount to justify the sale of flats at low price to the trust - Held that:- In cases when there is no direct evidence, findings have to be been given after taking into account the surrounding circumstances and after applying the test of human probability which is an accepted principle as held by the Hon'ble Supreme Court in the case of D.P. More [1971 (8) TMI 17 - SUPREME Court]- On the facts of this case, considering the actual practice in construction industry, the probability of payment being made to government officials is very high which is supported by actual entry on the impounded documents - On the other hand, it is highly improbable that the partner being a religious person will lie to the religious trust and show favours by inflating cost when no favour have actually been given - Sum of Rs.1,32,65,000/- appearing on the impounded document, which is clearly attributed towards various clearances given by the authorities such as commencement certificate, intimation of deficiency etc. represented the money actually paid which is unaccounted. Amount can be added as unaccounted expenditure under section 69C of the Act only in the year in which expenditure has been actually incurred - Dates of clearances, such as, IOD, commencement certificate, condonation of deficiency, occupation certificate etc. can be reasonably taken as the dates of incurring the expenditure - Making addition of the entire amount in this year without ascertaining the dates of incurring such expenditure is not justified – Matter restored to the file of A.O. to pass necessary order after examination. Addition of Rs.57,82,000/-, Rs. 10.00 lacs, Rs.12.00 lacs on the basis of entries made in the impounded documents - The sum of Rs.57,82,000/- has been explained as interest calculated for the period of early payment of installments. It had been explained that since payments had been made before due dates, the interest for the period had been calculated to be reduced from the cost of land. The sum of Rs.12.00 lacs has been explained as brokerage payable by SIWL to Durga Estate which had been paid by the assessee on their behalf and tax had also been deducted at source. As the vendor could not pay the amount, the same was reduced from cost of land - The sum of Rs.10.00 lacs has been explained as paid by the assessee to the vendor who had also given a hundi dated 31.1.2001 for repayment but since amount was not paid, this was reduced from the cost – Held that:- The amount of Rs.57,82,000/- was apparently calculation of interest @18% which had been reduced from the cost. The sum of Rs.12.00 lacs was brokerage paid on behalf of the vendor on which had also been deducted and amount had been reduced from the cost. None of the above amounts had been claimed by the assessee as expenditure in the P&L Account - Sum of Rs.10.00 lacs being personal loan given by the assessee was also reduced from the cost. Moreover, this amount related to assessment year 2001-02 and, therefore, could not be added in this year - Similar entry of Rs.46.00 lacs noted on the same document had been accepted by AO which had also been reduced from the cost – Hence, the addition made is deleted – Decided against the Revenue. Allowability of prorata deduction under section 80 IB(10) of the Act - There were many flats in respect of which built up area exceeded 1000 sq.ft. violating the conditions prescribed under section 80 IB(10) – Held that:- The deduction under section 80IB(10) can be allowed only on fulfillment of certain conditions one of which is that built up area of each flat should be less than 1000 sq.ft. – In the instant case, 14% of built-up area consisted of flats which have built up area exceeding 1000 sq.ft. - Proportionate deduction for 86% of built up area which consisted of flats of built up area less than 1000 sq.ft. is allowed – Decided against the Revenue.
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