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2021 (9) TMI 106 - HC - Income TaxAddition u/s 40A(2)(b) - purchase of the lands from the Directors at excessive rate - expenditure incurred by the assessee company for payment of the sale price to the Directors - assessee company had purchased larger extent of land from its two Directors/shareholders which was later sold by the assessee at the rate which is far less than the Guideline Value which is far far less than the selling price paid to the Directors - Tribunal holding that the price for the land purchased and paid to the Director was not excessive while comparing with the fair market value of the land - HELD THAT:- As the assessee company owns the land behind the lands owned by the Directors and if the lands owned by the Directors are purchased, then it would give better access to the land owned by the company and it will be a good decision of the company to improve its financial well being. These decisions are all commercial decisions, which have to be taken by the assessee, and it is not for the Assessing Officer to sit in the arm-chair of the assessee and suggest the ways and means to run their business as long as there is no unlawful activity, which has been alleged to have been done by the assessee. Thus, we are of the considered view that the Tribunal was right in affirming the order passed by the CIT(A) holding that the decision to purchase the lands from the Directors at excessive rate was a prudent commercial decision taken by the assessee company. No ground to interfere with the order passed by the Tribunal holding that the price for the land purchased and paid to the Director was not excessive while comparing with the fair market value of the land. - Decided against revenue.
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