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2013 (11) TMI 413 - AT - Income TaxDeduction u/s 48 - Development expenditure - Onus of proving nature of exdpenditure - Held that:- Suffice it to say that the assessing officer categorically observed that the sale deed do not contain any clause, whereby development of land was required to be carried out by the assessees as part of the package of sale. Section 48(i)&(ii) provides for mode of computation of capital gains whereby, an assessee is entitled to compute the capital gains taxable under the Act by deducting, from the full value of the consideration received, the following amounts i.e. (a) expenditure incurred wholly and exclusively in connection with such transfer and (b) the cost of acquisition of the asset and the cost of any improvement thereto - In respect of any claim of expenditure, the initial onus is upon the assessees to prove that such expenditure was incurred wholly and exclusively in connection with such transfer. In the instant case, the assessing officer repeatedly asserted that development is not a pre-condition for sale - the expenditure claimed to have been incurred by the assessees herein is about 30% and no business man would ordinarily spend such amount voluntarily unless they are compelled to do so and such compulsion should be reflected in the sale deed. Similarly, even if the land had to be developed/filled in, nobody would be willing to incur generously 30% of the sale price that too without any agreement, either with the purchaser or with the developers. It is also necessary to notice that the developers, being business men, would not ordinarily take up such contracts without anything in writing and without any prior payment. The entire surrounding circumstances plainly go to prove that the assessing officer has correctly noticed the facts and arrived at a conclusion that development expenditure cannot be allowed as deduction u/s 48 of the Act. Merely because he has drifted from his main observations to estimate expenditure on adhoc basis and to generously allow the same as deduction the Ld. CIT(A), whose powers are co-terminus with that of the assessing officer, should not remain as a mute spectator of the game - Therefore, matter is restored back to CIT - Decided in favour of Revenue.
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