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2018 (1) TMI 1503 - AT - Income TaxAllowability of claim of loss on sale of lands - HELD THAT:- The assessee, by just paying a token amount of ₹ 7 Lakhs/- to certain mediators, who are said to be a group of people who acquire land from agricultural land owners for selling the same to big customers and entering into an agreement of sale with just one of the group members, cannot be said to have acquired all the rights in the said land of 6.41 Acres for ₹ 7,05,37,500/-, at Tauru, District Gurgaon, Haryana. At best the assessee could have acquired certain rights against the intermediaries/brokers/land pooling agents. There is no purchase of land. Such agreements cannot form part of "stock-in-trade" of the assessee. These arguments at best give rise to certain claims for recovering of money. When the agreement was said to have been entered into on 24/03/2009, its time period was only up to 31/03/2009. Only ₹ 1 Lakh was taken as advance from M/s. A One Agerco Pvt. Ltd., New Delhi. When the Bench expressed its surprise, as to how the CIT(A), allowed the claim of the assessee on these facts and circumstances, assessee submitted that the entire amount has been paid to the vendors of the land by the assessee. This submission of the ld. A/R, is contrary to the recording of fact by the Assessing Officer at page 4 of his order, where he states that "the assessee has not made the said payments as specified in the said agreement of sale." Similarly, there is no proof of M/s. A One Agerco Pvt. Ltd. fulfilling its obligation under the agreements. All these documents in our view are self-serving documents. This is neither a purchase nor a sale of land. The finding of AO has force. A plain examination of the documents take us to a conclusion that this is a false and bogus claim. CIT(A) has in a slipshod manner allowed such huge claim of the assessee. In any event, as there is contradiction in the facts of the case, as has been presented by assessee and that recorded by the AO, we set aside this issue to the file of the CIT(A), with a direction to verify whether the assessee company had made payments to the tune of ₹ 7,05,37,500/-, to the group of brokers for acquisition of land. CIT(A), is also directed to verify whether M/s. A One Agerco Pvt. Ltd. had paid the entire money to the assessee and acquired the land in question. As the ld. CIT(A) failed to examine the applicability of Section 40A(3) of the Act. we direct him to do so. Allowability of payment of non-compete fees - HELD THAT:- The amount was not received by M/s. Mittal Corporation Ltd., under the head legal and professional service and hence the statement of the ld. A/R, to that effect, has no bearing on the claim of the assessee. As the assessee has paid the amount to M/s. Mittal Corporation Ltd. and as the amount received was offered to tax by M/s. Mittal Corporation Ltd., the revenue should have no grievance in this regard. In the result, this ground of the revenue is dismissed. Disallowance of expenses claimed at 10 per cent in the place of 1/3rd, disallowed by the AO - HELD THAT:- These are ad-hoc disallowances. As the D/R, did not controvert the finding of the CIT(A) we find no reason to interfere in this issue of percentage of ad-hoc disallowance of administrative expenditure. In the result, this ground of the revenue is dismissed. Allowability of expenditure claimed towards leveling and fencing - AO disallowed the claim as the assessee did not furnish supporting documents for the expenditure claimed - HELD THAT:- CIT(A) has not controverted the finding of the AO that the assessee has not produced the supporting documents of having incurred expenditure towards leveling and fencing. Mere production of a ledger account and payments by way of cheques does not suffice in this case. As the assessee has not produced necessary evidence, we uphold the order of the AO and reverse the finding of the CIT(A). In the result, this ground of the revenue is allowed.
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