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2014 (8) TMI 423 - HC - Income TaxRestriction of land development expenses – Held that:- The Tribunal in assessee’s own case was of the view that there is a mistake apparent on record - the total disallowance including the offer made by the assessee should not exceed 10% of the land development expenses incurred in cash by the assessee - in any of the the assessment years in case the offer made by the assessee is more than 10% of land development expenses incurred in cash - assessee is also not aggrieved by the subsequent order passed by the Tribunal – Decided against Revenue. Interest free funds disallowed – No evidence for advances given – Held that:- The Tribunal in assessee’s own case was of the view that the Department has not produced before the Court any iota of material rebutting the finding arrived at by the Tribunal – revenue has also not pointed out any specific error of law committed by the Tribunal – monies have not been advanced during the year and they were advanced in earlier years out of interest free funds and, therefore, there is no diversion of borrowed funds by the assessee for non-business purposes - Decided against Revenue. Depreciation on roads and electrical fittings – Held that:- The roads connect the various amusement rides within the park with one another – CIT(A) as well as the Tribunal proceeded on the basis that the roads are not adjunct to any buildings and it cannot be classified under buildings for depreciation purposes - A reading of the provision makes it clear that building includes roads, bridges, culverts, wells and tubewells - The provision is not restricted to only roads adjacent to buildings – CIT(A) as well as the Tribunal have not considered the aspect fell into error in accepting the assessee's plea that 20% depreciation on roads and electrical fittings should be allowed - the AO was justified in restricting depreciation to 10% and 15% - Decided in favour of Revenue. Drawings by the Directors debited under the head sales promotion and travelling expenses – Held that:- There is a clear admission by the Director that the personal expenses are met out of the bank accounts of the assessee only - credit card expenses, foreign travel expenses of directors, household expenses, etc. are debited under the head Sales Promotion and Travelling Expenses in the VGP Housing (P) Ltd / VGP & Co Pvt Ltd books of account – the issue relating to deleting the addition on account of drawings of directors should be considered by the AO on merits based on materials to be produced by the assessee – thus, the matter is remitted back to the AO – Decided in favour of Revenue.
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