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Income Tax - Case Laws
Showing 41 to 60 of 667 Records
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2020 (12) TMI 1262 - KARNATAKA HIGH COURT
Under-statement of income - addition on account of lumpsum leasing charges received by the assessee - Lease deed is unregistered one - tribunal deleted the addition - HELD THAT:- Tribunal has decided the aforesaid issue in favour of the assessee on the basis that the lease rentals have been consistently offered to tax and the revenue cannot take any inconsistent stand.
As submitted by revenue that the aforesaid lease on which reliance has been placed by the Tribunal is unregistered , the same has not been taken into consideration by the Tribunal. Therefore, the matter needs to be remitted to the Tribunal to consider the substantial question of law involved in this appeal afresh.
The order passed by the Tribunal is hereby quashed. The matter is remitted to the Tribunal to consider the substantial question of law involved in this appeal afresh, in accordance with law.
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2020 (12) TMI 1255 - ITAT BANGALORE
TP Adjustment - Comparable selection - negative working capital adjustment - HELD THAT:- Referring to assessee ITeS company companies functionally dissimilar with that of assessee.
Negative working capital adjustment - There is no allegation in the case of the assessee that the assessee has used any borrowed fund for working capital or there is any risk of money lost in credit time provided to the customers. Accordingly, we hold that negative working capital adjustment is not justified in the case of the assessee.
Inclusion of ICRA Online Ltd. - CIT(A) has analyzed the functional details and come to the conclusion that ICRA Online Ltd. is a Knowledge Process Outsource (KPO) company which is different from Business Outsource Company (BPO) which is the line of business of the Assessee in the present case. Hence, we uphold the exclusion of this company from the list of comparable companies.
I-Gate Global Solutions Ltd.- We uphold the exclusion of this company from the list of comparable companies by applying the turnover filter.
Determining ALP under TNMM - As correct approach would be to look at the costs incurred by the assessee only and should not impute any additional cost as done by TPO, which indirectly enhances the ALP artificially. The contrary view expressed in decision cited by the learned DR takes the view that Working capital adjustment is required in all cases as any credit extended to customers will result in cash locked up and will result in the assessee borrowing money from the banks and incur additional cost towards interest on these borrowings which cost will have effect on the price charged.
It is the reasoning in these decisions that under TNM method that every ingredient of profit margins of comparable companies are analysed, whether it is positive or negative. The decision proceeds on the basis of effect on price owing to working capital requirement. We are of the view that working capital adjustment itself is computed on the basis of outstanding current assets and liabilities at the year end. It means that other things being equal, an entity having higher working capital will incur more interest cost which will reduce profitability. Hence no importance shall be given to pricing aspect. Since the assessee does not have any working capital risk, the question of negative working capital does not arise.
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2020 (12) TMI 1249 - ITAT KOLKATA
MAT Computation u/s 115JB - computation of book profit/MAT against the action of AO in adding back the provision for diminution in investment and provision for NPA (Non-Performing Assets) - Whether clause (i) of Explanation (1) to sub-section (2) of section 115JB of the Act could be attracted in the facts of this case? - HELD THAT:- Provision for diminution in Investments would amount to an actual “write off” of Provision from the Assets side and therefore would not attract clause (i) of the Explanation to subsection (2) of section 115JB of the Act as held by the Hon'ble Gujarat High Court in the case of Vodafone Essar [2017 (8) TMI 451 - GUJARAT HIGH COURT] since Assets side of the Balance Sheet has also been accordingly reduced in the present case of the assessee, so, we agree that provision for diminution in investment was not a mere provision but it was actual write off and so, clause (i) of Explanation (1) of sub-section (2) of section 115JB of the Act is not attracted to the facts of this case and so we uphold the action of Ld CIT(A) on this issue.
Non-performing asset - Not only a mere 'Provision for Non-Performing Assets' was created by the assessee by debiting the Profit and Loss account but simultaneously the corresponding amount from ‘Loans and Advances’ shown on the Asset side of the Balance Sheet was also reduced/adjusted. In other words, the ‘Loans and Advances’ were recorded in the books as net of provision. Thus, in view of the above facts, the said Provision for diminution in non-performing assets would amount to an actual write off of Provision from the Assets side and therefore would not get attracted by clause (i) of the Explanation to subsection (2) of section 115JB of the Act as held by the Hon'ble Gujarat High Court in the case of Vodafone Essar [2017 (8) TMI 451 - GUJARAT HIGH COURT] since the Assets side of the Balance Sheet has also been accordingly reduced in the present case of the assessee. Thus, we note that the accumulated closing provision of ₹ 2620.53 million was reduced from the current assets, loans and advances which are evident from page 36 of the paper book, which we find to be correct. Thus, the said provision was an actual write off and, therefore, it does not attract clause (i) of Explanation (1) of section 115JB of the Act. - Decided in favour of assessee.
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2020 (12) TMI 1244 - ITAT DELHI
Addition of interest of enhanced compensation - amount having been received u/s 28 of the Land Acquisition Act - diversified decisions - HELD THAT:- It is a settled law that Statute must be interpreted according to the intention of the legislature and the court should act upon the true intent of the legislation while applying the law and its interpretation. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the legislature. In the present case the Department circular number 5/2010 dated 3/6 / 2010 clearly demonstrates the intention of the legislature. Accordingly we hold that interest on u/s 28 of the land acquisition act, 1894 being part of the compensation shall be treated as a tax free in the case of an individual and HUF u/s 10 (37) if transfer is of an agricultural land. In view of above facts and judicial precedence we hold that the interest received by the assessee u/s 28 of the land acquisition act is not taxable. Ground of the appeal of the assessee are allowed.
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2020 (12) TMI 1242 - ITAT MUMBAI
Reopening of assessment u/s 147 - non disposing off the objections as put by assessee - HELD THAT:- As could be seen from the decision of FOMENTO RESORTS AND HOTELS LTD., [2006 (11) TMI 645 - BOMBAY HIGH COURT] even if Assessing Officer disposed off the objections raised by the assessee in the Assessment Order while completing the re-assessment that is not in compliance with the decision of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] in other words the Assessing Officer shall pass a separate speaking order disposing off the preliminary objections raised by the assessee in reopening the assessment. In the case on hand before us since Assessing Officer failed to dispose off the preliminary objections of the assessee by way of a separate order, respectfully following the decision in the case of Fomento Resorts & Hotels Ltd. v. ACIT [2006 (11) TMI 645 - BOMBAY HIGH COURT] we quash the re-assessment order passed u/s. 143(3) r.w.s. 147 of the Act for the A.Y. 2011-12. The preliminary ground raised by the assessee is allowed.
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2020 (12) TMI 1240 - ITAT KOLKATA
Revision u/s 263 - addition u/s 68 - Bogus LTCG - AO failed to identify the purpose for which the assessee’s return was selected for scrutiny and thereafter the AO has not taken into consideration the investigation report about penny stock and especially the price variation of scrip thus the AO failed to conduct proper investigation on the claim of LTCG and thus there was non-application of mind by AO, resulting in passing an erroneous assessment order as well as caused prejudice to the interest of Revenue - HELD THAT:- We find from queries raised by AO and replies given by the assessee on the issue of LTCG on sale of shares which we have discussed in detail which is not being repeated for the sake of brevity and to avoid repetition, we find that AO has conducted enquiry based on investigation report and after having collected all the information and having gone through the documents and having carried out cross-verification from broker and seller of scrip, the AO issued another letter dated 26.12.2017 in respect of the LTCG claim of the assessee, wherein question regarding price variation of ₹ 15/- to ₹ 565/- per share of M/s KPL [question number 8] and the investigation report [question number 10] was asked, the AO being satisfied with the replies, have taken a plausible view which is in line with the views expressed by various Hon’ble High Courts and this Tribunal.
AO’s view which was taken by him, after enquiry as discussed supra cannot be termed as unsustainable view in the eyes of law and since AO’s view is plausible view it could not have been interfered by Ld. Pr. CIT as held by Hon’ble Supreme Court in Malabar Industries Ltd. [2000 (2) TMI 10 - SUPREME COURT] - since the Ld. Pr. CIT failed to show/demonstrate that the order of the AO was erroneous in respect of accepting the claim of LTCG, we find that the condition precedent necessary to invoke the revisional jurisdiction to u/s 263 of the Act is absent and, therefore, we are inclined to allow the appeal of the assessee
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2020 (12) TMI 1239 - DELHI HIGH COURT
Rectification u/s 254 - Tribunal erred in failing to decide the application for additional evidence filed by the appellant under Rule 29 of the ITAT Rules - HELD THAT:- Issue Notice. Mr. Raghvendra Singh, learned senior standing counsel accepts notice. He states that he has not been served with an advance copy of the appeal. Let a soft copy of the present appeal be served upon him during the course of the day.
List on 17th December, 2020. The order be uploaded on the website forthwith
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2020 (12) TMI 1233 - ITAT MUMBAI
TDS u/s 194H - discount to MRP given by the assessee company to the distributors at the time of sale of drugs-medicine to the distributors - HELD THAT:- As observed that the said distributor M/s Rudra Pharma Distributors Limited is registered with VAT authorities and is raising its invoices (including VAT) to their customers, whereby all the above facts clearly reflects that the distributors is buying the products from the assessee company and then selling the same in its own right with all risks and rewards of ownership got vested in the said distributors on the delivery of goods by carrier to the said distributor which is also supported by the clause 5 of the distribution agreement dated 01-07-2001. We, therefore, hold that the assessee company has paid discount to MRP to the distributors at the time of sale of the said goods/products i.e. drugs-medicine which in our considered view is not covered u/s 194H of the Act and no tax was required to be deducted at source on these discount to MRP given by the assessee company to the distributors at the time of sale of drugs-medicine to the distributors.
TDS u/s 194A - Interest delay in payment of bills for purchases effected - HELD THAT:- It is not disputed that the interest paid is not for any loan or debt incurred by the assessee but for the delay in payment of bills for purchases effected from M/s. Sinermas Pulp & Papers Ltd. Therefore, it has to be seen as to whether such payment is in the nature of interest as envisaged u/s. 2(28A) of the Act. As seen from the order of the ITAT Ahmedabad Bench in the case of Parag Mahasukhlal Shah [2011 (6) TMI 148 - ITAT, AHMEDABAD] the Tribunal has held that a payment which has direct link and immediate nexus with the trading liability being connected with the delayed purchase payments will not fall within the category of interest as defined in section 2(28A) of the Act. The payment made by the assessee in the present appeal being of similar nature also cannot be termed as interest as defined u/s. 2(28A) - Decided in favour of assessee.
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2020 (12) TMI 1226 - ITAT MUMBAI
Vivad se Vishwas Scheme 2020 - HELD THAT:- Since the assessee has opted for ‘Vivaad se Vishwas Scheme 2020’ and has filed an application as envisaged by the Ld.AR. We are of the view that, no purpose will be served in keeping the appeal pending. Accordingly, we dismiss the appeal of the assessee as withdrawn and the assessee is given liberty to move an application u/s 254(2) of the Act to recall the present order in accordance with the provisions of law.
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2020 (12) TMI 1225 - ITAT CHENNAI
Method of determination of provision of warranty, liability movement of warranty provisions - AR submitted that the provision of warranty is recognized by the assessee in compliance with the Accounting Standard-29 (AS-29) as prescribed by the ICAI at the time of sale and not at the time of settlement - HELD THAT:- As the assessee has been consistently following this method, which has been found by the Hon’ble ITAT, to be scientific and the conditions laid down by the Hon’ble Apex Court in in Rotork Controls India (P) Ltd [2009 (5) TMI 16 - SUPREME COURT] is also met, supra, which has also been upheld by the Hon’ble High Court, [2020 (8) TMI 768 - KARNATAKA HIGH COURT] Therefore, we do not find any merit in the Revenue’s appeal and hence, dismiss the same.
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2020 (12) TMI 1224 - ITAT MUMBAI
Exemption u/s 11 - rejecting the assessee’s application for registration u/s.12A - HELD THAT:- In our considered opinion the non-compliance by the assessee is fully attributable to the conduct of the consultant. In the substance interest of justice, we remit the issue to the file of learned CIT(A). Learned CIT(A) shall give the assessee one more opportunity for the compliance of his queries. Thereafter he shall decide as per law. The assessee is also directed to provide full cooperation.
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2020 (12) TMI 1221 - ITAT DELHI
Penalty u/s 271(1)(b) - No response on the show cause issued u/s 274 - HELD THAT:- Facts on record prove that the assessee has indeed replied on 19.11.2018 and explained that the notice dated 16.10.2018 has not been received by them and there was a noting of the Assessing Officer on the letter. Thus, the observation of the Assessing Officer that there was no compliance to the show cause was contrary to the findings on the record. Hence, the penalty levied is liable to be obliterated - Appeals of the assessee are allowed.
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2020 (12) TMI 1212 - ITAT AHMEDABAD
Condonation of delay - Misc. Application filed by the assessee is late by 650 days - assessee wants to settle the issue under Vivad se Vishwas Scheme - HELD THAT:- The reasons for delay in filing present MA cannot be simply brushed aside, as the same are based on the facts narrated by the assessee and supported by an affidavit which deserve reasonable and lenient consideration in view of Rule 24 of the Income Tax (Appellate Tribunal) Rule 1963.
CBDT also explained vide Circular dated 4.12.2020 (supra) that MA pending as on 31st January, 2020 would also be covered under the Vivad se Vishwas scheme. In view of this, and coupled with the fact that the assessee has filed letter dated 4.12.2020 stating therein that the assessee wants to settle the issue under Vivad se Vishwas Scheme and the willingness of the assessee-company to avail the benefit of the scheme, which claim are supported by form No.1 and 2 (copies of which placed on record), we condone the delay in filing the MA., and allow the assessee for exercising option to avail benefit under VSV scheme. Considering the above facts and circumstances, the MA of the assessee is allowed and Registry is directed to list the appeal for hearing on 4th February, 2021.
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2020 (12) TMI 1211 - ITAT AHMEDABAD
Condonation of delay in filling rectification application - application under Vivad se Vishwas Scheme - HELD THAT:- The reasons for delay in filing present two MAs cannot be simply brushed aside, as the same are based on the facts narrated by the assessee and supported by an affidavit which deserve reasonable and lenient consideration in view of Rule 24 of the Income Tax (Appellate Tribunal) Rule 1963. In view of this, and coupled with the fact that the assessee has filed letter dated 3.11.2020 stating therein that the assessee wants to settle the issue under Vivad se Vishwas Scheme and wants to file declaration for settlement of the issue under appeal by the assessee, we condone the delay in filing the MAs., and allow the assessee for exercising option to avail benefit under VSV scheme. Considering the above facts and circumstances, the MA of the assessee are allowed and Registry is directed to list these cases for hearing on 20.1.2021.
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2020 (12) TMI 1201 - KARNATAKA HIGH COURT
Revision u/s 263 - Characterization of income - As per CIT AO has not satisfied itself that the assessee was engaged in the business of purchase and sale of plots and has not brought any material on record to show that investment in the property was made for the purposes of trading - income assessed as income from business in respect of sale of properties as income from capital gains to disallow interest on loan of purchase of property as deduction from sale consideration, to direct the Assessing Officer to adopt guidance value of sub registrar in respect of one property as deemed sale value and to bring to tax the difference and to allow deduction under Section 80C - HELD THAT:- Commissioner of Income Tax as well as the tribunal has failed to appreciate that the Assessing Officer had put 36 questions to the assessee to ascertain the nature of business of the assessee and from perusal of questions Nos.16 and 18, it is evident that the aforesaid questions specifically pertain to issue of classification of income.
It is pertinent to note that several notices were issued to the assessee and detailed hearings were conducted and the Assessing Officer in its order has mentioned the details of all the properties with dates of purchase and sale and from perusal of the same, it is evident that the properties were brought and sold within a maximum period of 20 months, from which it is evident that the assessee was engaged in real estate business. Assessing Officer has conducted sufficient enquiry as required under Explanation 2(a) to Section 263 and there was material available on record to arrive at a conclusion, which was recorded by the Assessing Officer. It is trite law that merely because a different view can be taken, the powers under Section 263 of the Act cannot be invoked - Decided in favour of assessee.
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2020 (12) TMI 1200 - ITAT DELHI
Exemption u/s 10(23C)(iv) denied - activities of the assessee Trust as hit by the proviso to section 2(15) - according to AO assessee’s activities of providing food and beverages, accommodation against which charges are made from the members and non-members constitute commercial activities and therefore according to the AO the activities of the assessee Trust are not governed by the proviso to section 10(23C)(iv) - HELD THAT:- We have gone through the record in the light of the submissions made on either side. Record reveals that the main reasons of denying exemption u/s 10(23C)(iv) of the Income Tax Act by the learned Assessing Officer is that the activities of the assessee Trust are hit by the proviso to section 2(15) and according to the learned Assessing Officer, assessee’s activities of providing food and beverages, accommodation against which charges are made from the members and non-members constitute commercial activities and therefore according to the Assessing Officer, the activities of the assessee Trust are not governed by the proviso to section 10(23C)(iv) of the Act. Ld. Assessing Officer has also noted that although the assessee claims that it is working on “no profit and no loss basis”, yet the income and expenditure account of the assessee Trust reveals that it earning surplus year after year.
Reasons for denying the exemption by the learned Assessing Officer in 2013-14 and 2014-15 or identical to the reasons recorded for earlier years, namely, Assessment Year 2009-10 by the learned DIT in his order u/s 263 of the Income Tax Act and thereafter, on the identical grounds and by making similar observations the exemption has been denied. It is also not in dispute that the order u/s 263 for the Assessment Year 2009-10 was quashed by a coordinate Bench of this Tribunal [2015 (5) TMI 515 - ITAT DELHI] wherein it was held that the activities of the Trust of providing accommodation and food and beverages etc. does not constitute commercial activities and activities of the Trust are not hit by any proviso to section 2(15) of the Act.
There is no denial of the fact contended by the Ld. AR that though Revenue carried the matter in appeal to the Hon’ble Delhi High Court, such an appeal was dismissed by Hon’ble High Court. Further there is no denial of the contention of the assessee that the order of the Tribunal for the Assessment Year 2009- 10 was followed another Bench of this Tribunal in Assessment Year 2011-12 [2017 (10) TMI 1410 - ITAT DELHI] against which the Revenue challenged before dismissed by Hon’ble Supreme Court in SLP due to low tax effect.
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2020 (12) TMI 1199 - ITAT DELHI
Reopening of assessment - addition u/s 68 - Information was received from the investigation wing regarding the assessee was beneficiary of the accommodation entry - HELD THAT:- As perused the order passed by the Revenue Authority especially assessment order and we are of the view that no doubt there is information from the investigation wing. But in this case no enquiry has been conducted by the Assessing Officer and the said information could not be said to be the tangible material. Therefore, on this ground reassessment was not justified. See RMG POLYVINYL (I) LTD. [2017 (7) TMI 371 - DELHI HIGH COURT]
Case of the assessee was reopened on the basis of information received from the Investigation wing but the Assessing Officer has not made any enquiry on this information and reopened the case of the assessee and made the addition in dispute and completed the assessment. Similarly learned First Appellate Authority has also upheld the assessment order. In our view it is contrary to the various decision rendered by the Hon’ble Delhi High Court. Therefore, the reassessment on the basis of said information is not justified and legally valid, we quash the assessment order - Decided in favour of assessee.
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2020 (12) TMI 1198 - ITAT JABALPUR
Addition u/s 68 - Unexplained cash creditors - onus to prove - HELD THAT:- A perusal of the material on record shows that the entire sum credited stands explained with reference the creditor's existing capital and/or current income. No verification of the same was however done by the AO. In fact, as explained by Sh. Bardia during hearing, the production of the creditors by the assessee was sought by the AO in the assessment proceedings as an alternate to the submission of an explanation in writing - Even so, the assessee, despite furnishing documentary evidences, offered to produce the creditors, and for which he referred to the assessee's communications to the AO dated nil and 07/12/2017 - It was for this reason that we have opined that the impugned credits are to be regarded as explained upon confirmation of the claims not clarified with reference to the material on record.
Our decision, it may be appreciated, is in complete agreement with Metachem Industries [1999 (9) TMI 21 - MADHYA PRADESH HIGH COURT] by the jurisdictional High Court, wherein it stands held that once it is established that it is the creditors' money that has found its way in the books of the assessee, no adverse inference u/s. 68 could be drawn in its respect in the case of the assessee. The said establishment, it may be though clarified, is to be, in terms of the settled law, not on the basis the creditors' identity alone, as where the sum credited is shown to originate from his bank account, but also his capacity as well as the genuineness of the credit transaction.
Assessment is bad in law inasmuch as the same is not u/s. 153C as the filing of the return of income for the year on 26/9/2015 was followed by a search u/s. 132(1) at the premises of Sh. Tara Chand Khatri, loose papers and documents from whose residence relating to the assessee were found and seized - We are wholly unable to appreciate the assessee's case in this regard. A seizure of a document pertaining to the assessee would not by itself give rise to the jurisdiction to the AO to proceed u/s. 153C by issuing notice u/s. 153A. The same could only be on the AO being positively satisfied as to the said material having a bearing on the assessee's income for a specified year/s. There is no whisper of any reliance by the AO on the said material while assessing the assessee's income for the relevant year, or even in the appellate proceedings. Now it could be nobody's case that the AO ought to be necessarily so satisfied - a matter of fact, and which therefore is to be demonstrated, and, further, without in any manner stating, much less showing, the basis thereof, even as there is nothing on record, nor any pointed out, to exhibit the said satisfaction. The provision, as its' reading would show, is for the benefit of the Revenue, providing it additional time to frame an assessment in search and search-related cases. No case stands made out, with there even being no reference to any such material relied upon in determining the assessee's income even during hearing. The assessee's challenge is without any basis on facts and in law
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2020 (12) TMI 1197 - ITAT DELHI
Capital gain - collaboration agreement entered by assessee for a property - indexation of the cost the capital gain chargeable in the hands of the assessee - whether the transfer took place in Assessment Year 2007-08 as claimed by the Revenue or in Assessment Year 2009-10 as claimed by the assessee? - HELD THAT:- Hon'ble Supreme Court in the case of Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT] held that the execution of unregistered Joint Development Agreement with an irrevocable Power of Attorney in favour of the Developer does not result in the "transfer" for capital gains liability.
The agreement in the present case is not registered one, it does not have any impact in the eye of law for the purpose of Section 53A of the transfer of property act and similarly for defining transfer Under the income tax act. Therefore In the present case, the Collaboration Agreement was never registered. Therefore, the presumption of delivery of possession to the Collaborator cannot be assumed on signing the Collaboration Agreement, i.e., in AY 2007-08.
Even otherwise the assessee has offered the above capital gain in assessment year 2009 – 10, which is the property for the assessment of the transfer of capital asset and consequent capital gain in view of the decision of the honourable Supreme Court as stated above.
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2020 (12) TMI 1196 - ITAT INDORE
Revision u/s 263 - LTCG - Assessee eligible for deduction u/s 54 - expenses incurred for furniture and Air Conditioners while constructing the residential house property - HELD THAT:- So far exercising of powers u/s 263 of the Act is concerned, we find no infirmity in the order of Ld. PCIT as the Assessing Officer has wrongly allowed the claim without examining that how much deduction can be allowed. Ld. Counsel for the assessee argued that this order could be rectified by the Assessing Officer u/s 154 of the Act. However Ld. Counsel for the assessee did not bring to our notice any such action being taken by the Assessing Officer. Hence on this ground revision of the order is justified.
Adoption of the cost of acquisition of new asset - A residential house may have many other things, other than civil construction and including things like furniture and fixtures, as its integral part and may also be on sale as an integral deal. Further if these things are integral part of house being purchased, the cost of house has to essentially include the cost of these things as well. In such circumstances, what is to be treated as cost of the residential house is the entire cost of house and it cannot be open to the Assessing Officer to treat only the cost of only civil construction as cost of house and segregate the cost of other things as not eligible for deduction u/s 54. In this case it was not a composite deal, we find that the Ld. PCIT has also considered these case laws. However it is not clear whether the assessee had entered into with a contract with the contractor that included the cost of furniture and other fixtures. Ld. PCIT has also not brought any such evidence on record. Under these facts we modify the direction of Ld. PCIT to the extent that the Ld. Assessing Officer would allow the expenses incurred for furniture and Air Conditioners if it is part and parcel of the contract for construction of new house. This ground of the assessee is partly allowed.
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