Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 448 - AT - Income TaxShort Term Capital Gain - transfer of cost of improvement being addition to building - whether the sale proceed received by Director of assessee-company was also forming part of the sale against the building occupied by assessee-company? - Held that:- From the facts of the case, we find that the assessee, after having incurred renovation expense on the land and building belonging to the Director of assessee-company, made the place as usable for the purpose of its manufacturing activities. The assessee was treated as deem owner for the limited purpose of claiming of depreciation. As such, assessee-company never became the owner of the land and building. Therefore in our considered view sale proceeds received by Director of the assessee-company is taxable in the hands of Director and not in the hands of assessee-company. In view of above, we uphold the order of Ld. CIT(A). Revenue’s appeal is dismissed. Addition made on account of damaged opening stock - Held that:- Assessee has written off its stock of finished goods on the ground it became unfit for human consumption and for this reason stock of finished goods was for an amount of ₹ 7,19,336/- was destroyed. However the AO found that some sale out of the opening stock of finished goods was made during the relevant year. Therefore the claim of assessee was declined by AO. However, L’d CIT(A) deleted the addition made by AO as the amount involved of meager amount of ₹ 24,501/- only. We find that assessee has written off the closing stock of finished goods by debiting in its profit and loss a/c. We also find that business of assessee was of fruit and vegetable and raw materials used for the business was of green mango which was highly perishable. The business of assessee was severely affected for the reason discussed above. From the facts we also find that assessee had to sale its property under distress to repay the loan of the bank. As such, we find that the business of assessee as decreasing on yearto- year basis. Accordingly, we agree with the contention of L’d AR that the opening stock of finished goods became unfit for human consumption and same was duly debited in the profit and loss a/c of assessee. L’d DR has not brought anything contrary to the find of L’d CIT(A). Addition on account of damage/destruction of entire opening stock of packing material - Held that:- AO made the addition on surmise and conjecture without bringing any evidence on record. The AR has submitted the ledger copies of the parties for the purchase and sale of goods which is placed on page 88 of the paper book. In this view of the matter, we uphold the order of L’d CIT(A) and ground raised by Revenue is dismissed.
|