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2019 (11) TMI 752 - AT - Income TaxSurplus on sale of property u/s 50 - HELD THAT:- Upon due consideration, we find that the fact that the immovable property,which was sold by the assessee during the year under consideration, was part of block of asset Building remain uncontroverted before us. The assessee during assessment proceedings as well as appellate proceedings could not establish that the said property was not part of block of asset and depreciation against the same was never claimed in earlier years. As rightly noted by learned first appellate authority, the assessee could not brought on record the factual position, in this regard, for the year ending 31/03/2011 as well as for the year ending 31/03/2012. Similar is the position before us since despite being specifically directed, the assessee could not demonstrate this fact and bring on record sufficient material to demonstrate that depreciation was never claimed against the said property since its acquisition. Therefore, we find no reason to differ with learned first appellate authority on this point and concur with the conclusion that resultant gains were rightly brought to tax as short-term capital gains u/s 50. Ground No.1 stand dismissed. Claim of direct expenditure - HELD THAT:- The property tax as well as Best deposit, as rightly held by first appellate authority, could not be held to be part of cost of acquisition of the property. The same could also not be termed as cost of improvement or expenditure incurred wholly and exclusively in connection with transfer of property. Therefore, the same has rightly been disallowed. So far as the other expenditure is concerned, we find that the assessee failed to adduce sufficient documentary evidences to substantiate the same. Keeping in view the principal of natural justice, we deem it fit to provide another opportunity to the assessee to substantiate his claim with documentary evidences before Ld. AO. Therefore, for the said limited purpose, the matter stand restored back to the file of Ld. AO with a direction to the assessee to substantiate that expenditure in the nature of Legal expenses, brokerage, Repairs &Renovation qualified for deduction from sale of property. Ground No. 2 stand partly allowed for statistical purposes. Allowance of indirect expenditure which consist of employee’s benefit expenses and administrative overheads as business expenditure u/s 37(1) - HELD THAT:- As rightly held by lower authorities, these expenditures could not be allowed from sale of property under the head capital gains since these costs could not be termed either as cost of acquisition / improvement or expenditure incurred wholly and exclusively in connection with transfer of property. However, it is noted that the assessee was a corporate entity and it has to incur bare minimum expenditure to maintain its corporate personality despite the fact that no business activity was being carried out by the assessee. Therefore, on factual matrix, we deem it fit to restore the matter back to Ld.AO to reconsider the allowability of these expenditures with a direction to the assessee to substantiate the fact that the same fulfilled the conditions of Section 37(1). Ground No.3 stand partly allowed for statistical purposes.
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