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2018 (3) TMI 1522 - AT - Income TaxNon-application of funds accumulated u/s 11(2) - Non utilization of the accumulated funds within a period of 5 years from the date of accumulation as provided u/s. 11(2) - as per revenue construction of the building did not started before 2013 and hence the said payment cannot be allowed as application of accumulated funds - Held that:- The drafts were made by the assessee on 30.03.2011 by debit to its bank account on 30-03-2011 and the builder has issued receipt on 05.04.2011. The AO has not brought on record any evidence/material to prove that the said receipt dated 05.04.2011 were bogus/non-genuine. The enquiry conducted by the AO u/s. 133(6) as well as report of the inspector deputed to conduct field enquiries were not made available to the assessee and no cross examination was allowed to the assessee of the builder or of the inspector who conducted enquiries. It is not the case of the revenue that these demand drafts were subsequently cancelled at the behest of the assessee and also it is also not the case of the Revenue that the said commercial space was ultimately cancelled by the assessee and in fact the assessee got the possession of the said premises in the year 2016. Under these circumstances bona-fide of the assessee could not be doubted and more so there is no incriminating material on record to prove/show that said drafts were cancelled later on or the said booking was cancelled. Assessee on the other hand made statement before the bench that the assessee got the premises in 2016 after building was completed by M/s. Deal-Well Developers. The contentions of Revenue that since construction of the building did not started before 2013 and hence the said payment cannot be allowed as application of accumulated funds can also not be accepted and is a fallacious argument as the spaces / flats/floors in commercial/residential building has two elements namely building as well proportionate land underneath the said space/floors/flats. The purchaser has to pay for not only the constructed area but also towards the proportionate land underneath said flats/floor/space. We are inclined to accept the contentions of the assessee based on the material on record and the appeal of the assessee stood allowed and the benefit of an application of the income be allowed to the assessee. - Decided in favour of assessee.
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