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2015 (3) TMI 568 - AT - Income TaxCompensation paid to prospective buyers for delay in completion of project - CIT(A) deleted the addition - Held that:- So far as it relates to ₹ 7,22,250/- for Compensation paid the relevant clauses which are reproduced earlier are found in the sale agreement. To fulfill obligation of those clauses the assessee has made payment to the buyers. Thus, the payment of this amount cannot be said to gratuitous in nature as held by AO and Ld. CIT(A) has rightly deleted the addition on the basis of documentary evidences and we find no infirmity in such deletion and we decline to interfere. - Decided in favour of assessee. Compounding fees to Bangalore Mahangarpalika - CIT(A) deleted the addition - Held that:- So far as it relates to disallowance of ₹ 1,46,910/- for compounding fees it is observed that in the letter written by BMP it has clearly been mentioned that is towards taxes and the contents of the said letter are reproduced in the earlier part of this order. Thus, this payment also cannot be said towards penalty or violation of any provision of the Act. It was in the nature of tax. Therefore, we see no infirmity in this deletion and we decline to interfere. - Decided in favour of assessee. Development charges paid to M/s. R.M. Trust - CIT(A) deleted the addition - Held that:- So far as it relates to disallowance of ₹ 55,94,000/- for development charges after going through the documentary evidence submitted by the assessee before AO as well as Ld. CIT(A), Ld. CIT(A) has granted relief as this amount was towards the development charges paid to R&M Trust and thus, for this deletion also, we are of the opinion that there is no infirmity in the order passed by Ld. CIT(A). We decline to interfere. - Decided in favour of assessee. Option money received - According to AO such money received by the assessee represented sale consideration against sale of properties and requires to be taxed as income - CIT(A) deleted the addition - Held that:- The amount received by the assessee was against the right of option given to the respective parties and even according to the findings of Ld. CIT(A) these amounts were not received by the assessee in the year under consideration. Out of five parties, three parties refunded back the amounts. Regarding balance two parties, they still did not opt for purchase of plots. In these circumstances, in absence of any contrary material, we do not find any fault in the relief given by Ld. CIT(A). - Decided in favour of assessee. Service charges to its sister concern - AO disallowed 50% of the expenditure under the provisions of section 40A(2)(b) - CIT(A) upheld the disallowance to the extent of 10% - Held that:- CIT(A) has passed a speaking order. As per submissions made before AO and Ld. CIT(A) no disallowance was made on similar expenses in A.Y. 1998-99 and for A.Y. 1999- 00 10% disallowance was made on the ground that assessee did not get its account audited. However, for the year under consideration there is no failure of the assessee for getting its accounts audited. In the circumstances of the case, we do not find any infirmity in the order passed by Ld. CIT(A) vide which he has held that 10% of the total expenditure was required to be disallowed and such decision of Ld. CIT(A) will be in accordance with action of AO adopted in A.Y. 1999- 2000. Therefore, we decline to interfere in the relief granted by Ld. CIT(A) and this ground is dismissed. - Decided in favour of assessee.
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