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Income Tax - Case Laws
Showing 81 to 100 of 643 Records
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2015 (4) TMI 1226
Depreciation on Motor Cars - Rejection of claim on the ground that they are registered in the name of director of the company - Held that:- In view of the issue being settled in favour of the assessee by series of decisions in M/s Orbit Marketing Pvt. Ltd [2012 (10) TMI 1172 - ITAT MUMBAI] and Navjeevan Synthetics Pvt. Ltd. vs. ACIT [2013 (3) TMI 784 - ITAT MUMBAI] we reverse the order of the CIT(A) and direct the Assessing Officer to allow the assessee’s claim of depreciation on vehicles owned by the assessee company, which were registered in the name of the Directors of the assessee company. - Decided in favour of assessee.
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2015 (4) TMI 1221
Application of registration under section 12AA rejection - absence of the dissolution-clause - Held that:- We find that the DIT-E had denied the registration to the assessee-trust because he was of the opinion that in absence of the dissolution-clause trust was not entitled for registration.We find that in the case of Tara Education and Charitable Trust [2014 (7) TMI 869 - ITAT MUMBAI] and Geeta Lalwani Foundation (2015 (1) TMI 1368 - ITAT MUMBAI)the Tribunal had held that absence of dissolution deed could not be the basis for refusing registration to a trust. - Decided in favour of assessee
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2015 (4) TMI 1218
Invocation of provisions of section 69B - expenditure on the purchase of land more than that was recorded in the books of account - addition on entries in the loose paper found during the search action - Held that:- There was no evidence that any extra cash other than the sale consideration as recorded in the deed had changed hands. No statement of the sellers of the land had been recorded. No other corroborative evidence has been produced on the file by the Revenue Authorities to substantiate their allegation. The addition in this case has been made on the basis of the entries in the loose paper found during the search action, which at the most can be considered to have raised a suspicion about the transfer of money other than the sale consideration, but the suspicion itself and solely cannot be held to be a justifiable ground for making the additions, especially in the absence of any corroborative evidence. Except the loose papers in question no evidence, what to say of any direct or corroborative evidence, even no circumstantial evidence has been detected or brought on record by the Revenue. Hence, the additions solely on the basis of suspicion, how strong it may be, in our view, are not sustainable in the eyes of law. Additions in this case under section 69B of the Act are not warranted. - Decided in favour of assessee.
Estimation of Annual Letting Value (ALV) of the vacant flats at Central Garden Complex - Held that:- ALV be computed as per the municipal rateable value as deemed income from house property. See case of Shri Anil Kashiprasad Murarka vs. ACIT [2014 (12) TMI 1304 - ITAT MUMBAI]
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2015 (4) TMI 1216
Disallowance under Section 40A(3) - cost of the land as well as additional payment - expenditure not claimed - Held that:- The issue as raised squarely covered by the order of the co-ordinate bench as reproduced in M/s. Glitz Builders (2015 (5) TMI 384 - ITAT DELHI ). We concur with the finding of the co-ordinate Bench that when the cost of the land as well as additional payment has not been claimed by the assessee as deduction, then the question of any disallowance under Section 40A(3) or otherwise in the case of the assessee does not arise. We, therefore, delete the entire disallowance made by the Assessing Officer under Section 40A(3) as well as additional payment. Respectfully following the precedent as aforesaid we allow grounds of the assessee for Assessment Year 2006-07 and dismiss the ground of revenue.
Addition on account of Interest on PDCs paid out of books of account - Held that:- The PDCs’ have been encashed within a period of six months as is apparent from page 11 of assessment order where A.O. has noted the date of sale of properties and date of encashment of cheques. Therefore, we find that the facts in the present case are similar in one of the Sister concern i.e. case of M/s IAG Promoters and Development Pvt. Ltd [2014 (12) TMI 216 - ITAT DELHI] therefore, following the Tribunal order in the case of group company, we dismiss this appeal of Revenue.
Disallowance an additional payments u/s 37 - main contention of the ld AR is that having not claimed the expenditure, the same cannot be disallowed - Held that:- When the additional payment has not been claimed by the assessee as deduction, then the question of any disallowance. See M/s. Glitz Builders (2015 (5) TMI 384 - ITAT DELHI )
Addition made on account of interest on PDC - Held that:- The ground of revenue is factually incorrect and it was only a direction of ld CIT(A) to AO to re-calculate the interest on PDC’s on the basis of material seized during search and as per the direction the AO has found that there was no interest payable since the PDC were encashed before six months and we have already dismissed the appeal of the revenue on identical ground in earlier years, so on identical reason following the order of the Tribunal in M/s, IAG Promoters, we are inclined to dismiss this ground of the revenue.
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2015 (4) TMI 1213
Admission of appeal on following substantial questions of law:
(i) Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing assessee's claim of deduction under section 80IB(10) when assessee had not completed the project by 31st March, 2008 thus violating the provisions of sub section (i) of clause
(a) to section 80IB(10) of the Act?
(ii) Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing the assessee's claim of deduction under section 80IB(10) of ₹ 3,39,22,395/for the assessment year 2004-05
when the assessee had not commenced by 31st March, 2008 the construction of 2 out of 6 buildings comprised in the housing project in respect of which approval had been sanctioned by the local authority on 12th December, 2001?”
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2015 (4) TMI 1205
Registration U/s 12AA rejected - treating the application for registration u/s 12AA as time-barred - Held that:- Where application is made after first day of June 2007 then the benefit of sections 11 & 12 is available only with reference to the assessment year immediately following the financial year in which such application is made. This means that the benefit of sections 11 & 12 is not available to the earlier years for which the application is made. Therefore, in view of the above clear legal position and also concession made by Ld. Counsel for the assessee, the additional ground raised by the assessee is dismissed.
As far as the other grounds are concerned, we find that it is settled law that at the time of registration, the concerned authority is required to examine only the aims and objects of a particular institution and if the same are found to be of charitable nature, the registration should be granted. The other issue like non audit of accounts, non application of 85% of the funds for charitable purposes etc. can be examined only at the time of assessment when exemption is being granted u/s 11 & 12 of the Act. In the case before us, the Ld. Commissioner has not recorded any findings, how the objects of the assessee are not charitable. He has considered various other issues like non audit of accounts, the non application of 85% of the funds for charitable activities etc. which are not relevant for grant of registration, therefore, in the interest of justice, we set aside the order of Ld. Commissioner and remit the matter back to the file of Ld. Commissioner for reexamination of the issue and decide the same in accordance with law.
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2015 (4) TMI 1204
Expenses claimed as compensation of rock phosphate, Mineral Extraction expenses, Contribution to State Renewal Fund, Prior period expenses, Social Welfare activities expenditure - allowable revenue expenditure - Held that:- We see no infirmity in the order of the ld CIT(A) as the partial disallowance has been retained by following the ITAT order in assessee’s own case. Consequently, the same is upheld. The C.O. of the assessee is dismissed.
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2015 (4) TMI 1203
Allowable deduction on provision for NPA(Non Performing Assets) - whether claim of the assessee did not qualify under Explanation below section 36(1)(vii) to the effect that a provision will not amount to writing off? - Held that:- As decided in Southern Technologies Ltd. Vs. Joint Commissioner of Income-Tax [2010 (1) TMI 5 - SUPREME COURT OF INDIA] Section 36(1) (viia) provides for a deduction not only in respect of "written off" bad debt but in case of banks it extends the allowance also to any Provision for bad and doubtful debts made by banks which incentive is not given to NBFCs - even in the case of banks the Provision for NPA has to be added back and only after such add back that deduction under Section 36(1) (viia) can be claimed by the banks - that neither Section 36(1)(viia) nor Section 43D violates Article 14. We further hold that the test of "intelligible differentia" stands complied with and hence we reject the challenge - Provision for possible loss are only notional for purposes of disclosure, hence, they cannot be made an excuse for claiming deduction under the IT Act, hence, "add back".
The point which we would like to make is whether such losses are contingent or actual cannot be decided only on the basis of presentation. Such presentation will not bind the authority under the Income-tax Act. Ultimately, the nature of transaction has to be examined. In each case, the authority has to examine the nature of expense/loss. Such examination and finding thereon will not depend upon presentation of expense/loss in the financial statements of the NBFC in terms of the 1998 Directions. Therefore, in our view, the RBI Directions 1998 and the Income-tax Act operate in different fields. - Decided in favour of the revenue
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2015 (4) TMI 1202
Levy of penalty u/s 271(1)(c) - addition disallowance of additional price for purchase of sugarcane - Held that:- It has been clearly noted that increased prices was never paid to the farmers but adjusted in the share capital account. It is also noted that such increase was granted in the years of profits. If assessee really wanted to give benefit to the farmers, we fail to understand why money was not paid to the farmers. If money was to be adjusted in the share capital account then consent of farmers should have been obtained by way of general body meeting which was never done and the decision to convert to increased price was ratified only on 26.6.1995 These factors clearly shows that assessee has merely tried to evade tax by showing extra expenditure on account of enhance price for sugarcane.
No doubt the Hon'ble Supreme Court in the case of CIT v Reliance Petroproducts Pvt Ltd (2010 (3) TMI 80 - SUPREME COURT ) held that if a disclosure is made then it cannot be said that assessee has concealed particulars of the income.
This is not a case of mere disallowance of expenditure or disallowance of a particular deduction rather it is a case of disallowance of bogus expenditure which has been claimed just to reduce the profits earned by the assessee. Therefore, in our opinion, the Ld. CIT(A) has correctly confirmed the levy of penalty u/s 271(1)(c) of the Act and we uphold his action. Appeal of the assessee is dismissed.
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2015 (4) TMI 1201
Transfer pricing adjustment - MAM - whether while adopting the TNMM method, the entity level margin is to be adopted or only the margin of software development activity is to be considered separately from the margins of the Bio-Division which has sustained loss? - Held that:- We are of the opinion that only international transactions with Associated enterprises have to be considered for ALP adjustment. When Bio division does not have any international transactions with AEs, profit or loss from said division should not affect ALP of the international transaction in another division. Since neither the AO nor the CIT(A) have really examined the assessee’s contention that there was no international transactions with AE’s in the Bio division but have just combined the results of both software development as well as bio division for determining the ALP of the international transaction, we deem it fit and proper to set aside the order of the AO/TPO and remand the matter back to the AO with a direction to refer the matter to the TPO for re-consideration. The AO/TPO shall examine the assessee’s contention and after verifying the details, shall recompute the ALP of the international transaction u/s 92CA of the Act. - Decided in favour of assessee for statistical purposes
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2015 (4) TMI 1199
Deemed dividend received - dividend received from the companies having accumulated profits in which the assessee himself is a Director and has got substantial or beneficial interest - Held that:- The undisputed fact in this case is that the assessee has received loans from all the four companies on interest and therefore in view of the decision of the Jurisdictional High Court in the case of Pradip Kumar Mahlhotra (2011 (8) TMI 16 - CALCUTTA HIGH COURT) the said loan cannot be treated as deemed dividend. - Decided in favour of assessee
Disallowance u/s 40(a)(ia) - though the assessee received Form No.15G for non deduction of tax the said form was not submitted to the C.I.T. - Held that:- On identical issue in the case of S.S.Impex (2011 (9) TMI 927 - ITAT KOLKATA), Capital Transport Corpn (2011 (8) TMI 1068 - ITAT KOLKATA) the ITAT Kolkata Benches have held that if the assesse has received form No.15G the same has not been submitted to the appropriate authorities, no disallowance can be made u/s 40(a)(ia) of the Act. In the present case also the issue lies on the same point that Form No.15G for non deduction of tax at source has been received by the assesse but the same was not submitted before the appropriate authority i.e. CIT. Accordingly following the decision of the ITAT, Kolkata Benches (supra) no disallowance can be made u/s 40(a)(ia) of the Act. - Decided in favour of assessee
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2015 (4) TMI 1196
Penalty u/s 271(1)(c) - deduction under section 80IB(10) disallowed - Held that:- The search took place in the instant case on 11th February, 2009 but the return came to be finalized prior to 11th February, 2009. However, the assessee may not have questioned the orders in Quantum Proceedings by filing any appeal, yet, the Tribunal found that the original return of income was filed on 31st October, 2005. That was accepted by the Assessing Officer. The search took place on 11th February, 2009 and the deduction under section 80IB(10) was disallowed by the Assessing Officer on grounds not germane to section 271(1)(c). Meaning thereby, there was no material found during search based on which the disallowance was made. The disallowance was on account of non-furnishing of audit report under section 10 CCB and non-furnishing of certain details as called for by the Assessing Officer. In these circumstances, the penalty as imposed cannot be sustained. We do not find such reasoning to be perverse or vitiated by any error of law apparent on the face of the record. - Decided in favour of assessee.
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2015 (4) TMI 1195
Addition on account of interest received - addition on basis of AIR information - Held that:- Addition in this case has been made solely on the basis of AIR information and without any corroborative evidence regarding the receipt of any interest by the assessee from the said M/s. Essar Oil Ltd. The assessee has specifically denied the receipt of such an interest income. The Revenue has not made any enquires to find out whether the AIR information was correct or not. It has been held time and again by this Tribunal that the additions made solely on the basis of AIR information are not sustainable in the eyes of law. If the assessee denies that it is in receipt of income from a particular source, it is for the AO to prove that the assessee has received income as the assessee cannot prove the negative.
As Representatives of both the parties have agreed before us that the issue be restored to the file of the AO for consideration afresh in this respect, we accordingly restore it. Appeal of the assessee allowed for statistical purposes.
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2015 (4) TMI 1194
Penalty u/s 272A(2)(c) - reasonable cause for the delay on the part of the assessee to furnish the required information in response to the notices issued u/s 133(6) - intentional or willful delays - Held that:- The assessee has submitted that the sufficient cause pleaded by the assessee before the Ld. CIT(A) for the delay resulted in furnishing the required information in response to the notice issued under section 133(6) is supported by the correspondence and e-mails exchanged between the two assessee's which are the branches of the State Bank of India with their Head Office/Regional Office.
As contended that proper and sufficient opportunity however was not given to the assessee's either by the A.O. or by the Ld. CIT(A) to produce the said evidence and urged that one more opportunity may therefore, be given to the assessee's to support and substantiate its case of sufficient cause pleaded before the Ld. CIT(A) by producing the relevant evidence. Since the learned D.R. has also not raised any serious objection in this regard, we restore the matter to the file of the A.O. for the limited purpose of giving one more opportunity to the assessee to support and substantiate their case of sufficient case for the delay as pleaded before the Ld. CIT(A) by producing the relevant documentary evidence in the form of correspondence and e-mails exchanged with their Head Office/Regional Office. Appeals of the assessee are treated as allowed for statistical purposes.
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2015 (4) TMI 1190
TPA - comparable selection - selection criteria - Held that:- The Appellant provides mapping services mainly to COWI A/S, which is 59% of the total turnover of the Appellant. As per the functional analysis documented in the Transfer Pricing documentation, the Appellant can be is characterized as a service provider, which assumes less than normal risks associated with carrying out such business, companies functionally dissimilar with that of assessee need to be deselected from final list of comparability.
Computing the addition to the international transactions - appellant submitted that its AE segment transactions constitutes only 59% of the total transactions however DRP has held that percentage at 70% without any basis - Held that:- Before us assessee has submitted that it is only 59% and not 70%. The same facts were also put before ld. DRP vide letter dated 16th May 2011 placed at Page No.804 of the Paper Book. In view of the above facts to verify this factual matter as principal has already been accepted by ld. TPO on direction of DRP we set aside this matter to the file of ld. TPO to work out the correct adjustment after verification.
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2015 (4) TMI 1184
In this situation, admit on the following substantial questions of law :
“1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT erred in law by upholding the order of the CIT(A) deleting the penalty of ₹ 48,00,000/levied under Section 271(1)(c) of the Income Tax Act, 1961 ?
2. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal erred in law by considering extraneous factors as basis for surrender of income of ₹ 1,40,00,000/disregarding the fact that unaccounted closing stock of ₹ 1,40,00,000/was found during survey?”
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2015 (4) TMI 1182
Agricultural income u/s.2(1A)(b)(i) - exclusion of said income u/s.10(1) - Held that:- Appeal raises a substantial question of law, it is admitted on the following substantial question of law:
“Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in directing the Assessing Officer to treat assessee's income as agricultural income u/s.2(1A)(b)(i) of the IT Act and to exclude said income u/s.10(1) of the IT Act?”
The Registrar (Judicial)/Registrar, High Court, Original Side, Bombay to ensure that the original record in relation to this Appeal is summoned from the Tribunal and offered for inspection of the parties. This paperbook is treated sufficient for the purpose of admission of this Appeal.
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2015 (4) TMI 1181
Sale of tender documents - income from other sources or capital receipt - Nature of receipt - Held that:- A reading of the order of the CIT (Appeals) as also the Tribunal would reveal that the CIT (Appeals) has relied on the decision in Bokaro Steel case (1998 (12) TMI 4 - SUPREME Court) to come to the conclusion that in the case on hand, the receipt by way of sale of tender documents, even at the pre-commencement stage is inextricably linked to the process of setting up of business and, is therefore, capital in nature. Similar was the view of in the case of Indian Drugs & Pharmaceuticals (1981 (9) TMI 13 - DELHI High Court ), which view has been endorsed by the Supreme Court.
A reading of the order of the Tribunal would reveal that there can be no iota of doubt that the Tribunal failed to appreciate the finding of the Delhi High Court, in similar set of facts, which was ultimately endorsed by the Supreme Court that the receipts which are inextricably linked to the process of setting up of business could not be construed in any other manner other than in the nature of capital receipt.
The Tribunal fell in error in merely stating that the decision in Bokaro Steel case (supra) is distinguishable from Tuticorin Alkali Chemicals & Fertilizers case (supra), without even understanding the scope of the decision in Bokaro Steel case (supra).
The admitted fact in this case is that the amount received by the appellant/assessee in sale of tender documents at the pre-commencement stage is in relation to the establishment of the unit and, therefore, it could be clearly stated that it is intrinsically connected with the purpose of setting up of the unit. This Court is in agreement with the view expressed by the Supreme Court in Bokaro Steel case (supra), which has affirmed the view of the Delhi High Court in Indian Drugs & Pharmaceuticals case (supra) and is of the considered view that the said decision is squarely applicable to the facts of the present case. Accordingly substantial question of law is answered in favour of the appellant/assessee and against the respondent/Revenue.
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2015 (4) TMI 1179
Addition on account of depreciation of Iraqi assets - Held that:- As per the Tribunal order brought on record by Learned A.R. of the assessee, it was held by Tribunal in earlier years that the compensation received by the assessee is to be brought to the concerned block of assets and the said bock of assets is to be reduced accordingly. This finding of the Tribunal is in line with the provisions of the Act and therefore, we decline to interfere in the order of CIT(A) on this issue. Ground No. 1 is rejected.
Addition on account of depreciation on temporary erections - Held that:- We find that CIT(A) has given a clear finding that the issue in dispute is squarely covered in favour of the assessee by the Tribunal order in earlier years in assessee’s own case. He has also given a finding that there is no change in the facts of the present year. Learned D.R. of the Revenue could not point out any difference in facts in the present year. As per the Tribunal decision available on record also, we find that in assessment years 2001-02 and 2002-03, the Tribunal has followed earlier Tribunal decision for assessment year 94-95 and 96-97. Hence, it is seen that this issue has consistently been decided in favour of the assessee and no difference in facts could be pointed out by Learned D.R. of the Revenue. Hence, we do not find any reason to take a contrary view.
Retention money - Held that:- No difference in facts could be pointed out by Learned D.R. of the Revenue. Moreover, during the present year, the assessee has reduced an amount of ₹ 1,455.17 lacs from its income on account of retention money but the assessee has offered a larger amount of ₹ 8,039.29 lacs to tax being retention money not offered to tax in earlier years but offer to tax in present year on account of expiry of deferred liability period. Hence, it is seen that if the present year is considered in isolation, the amount offered to tax is more than the amount of income reduced from the income on account of retention money. This is also very important that at the end of the financial year 2010 – 11, the entire amount of retention money was offered to tax and considering these facts that no difference in facts could be pointed out by Learned D.R. of the Revenue, we do not find any reason to take a contrary view. Accordingly, ground No. 4 is also rejected.
Addition on account of manufacturing expenses being 7.5% of the total expenditure incurred on repair to building - Held that:- We find that this issue was also decided by learned CIT(A) as per Tribunal decision in assessee’s own case in earlier years. No difference in facts could be pointed out by Learned D.R. of the Revenue on this issue also. Therefore, we do not find any reason to take a contrary view in the present year on this issue also.
exemption U/s 80IA - absence of accounts and balance sheet of the assessee at the time of commencement of business, it is not possible to ascertain the investment made by the assessee initially and thus quantify the magnitude of capital introduced - Held that:- In the absence of accounts of the assessee for the initial years, it is reaffirmed that all the three Captive Power Plants (CPPs) i.e. 25 MW Plant Rewa, 25 MW Plant Bela Plant and 38.5 MW plant were initially were integral part of same unit to whom power was to be supplied and later, these CPPs were formed by splitting the existing business. The third objection was that the CPPs in question are not completely separate from that of the principal unit to which the concerned CPPs were supplying power. These objections of the Assessing Officer are to be examined and decided for allowing deduction for the first time but having allowed the deduction for the same three CPPs in assessment year 2007-08 as per assessment order passed by the Assessing Officer on 13/12/2009 u/s 143(3), the Assessing Officer cannot reject the claim of the assessee for deduction u/s 80IA in respect of same 3 CPPs in a subsequent year i.e. assessment year 2009-10 on the basis that initial capital is not known or that it is formed by splitting/reconstruction of the existing business etc. Hence, in view of the principle of consistency, we are of the considered opinion that there is no infirmity in the order of CIT(A) on this issue in view of the fact that in assessment year 2007-08, the Assessing Officer has himself allowed deduction to the assessee u/s 80IA in respect of the same 3 CPPs.
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2015 (4) TMI 1176
Disallowance u/s.14A r.w.r 8D - CIT-A deleted the addition - Held that:- DR has not brought on record any evidence to show that expenditure was incurred by the assessee for earning exempt income. Being so, the Commissioner of Income-tax(Appeals) is justified in deleting the addition made by the Assessing Officer by invoking provisions of sec.14A r.w.r. 8D for the assessment years 2008- 09 and 2009-10. Accordingly, this ground is dismissed.
Deduction u/s.54F - Held that:- There is no discussion by AO about the issue of investment in capital gains accounts scheme amounting to ₹ 6,10,000/- and ₹ 40,00,000/- and advance paid for the purchase of property. It means that the Assessing Officer has not given any comments regarding this issue. Being so, in our opinion, it is appropriate to remit this issue back to the Assessing Officer, as there is violation of Rule 46A. Accordingly, we remit the issues for fresh consideration with regard to investment in capital gains accounts scheme and the advance paid for the purchase of property back to the Assessing Officer, as he has only considered the investment in flat Nos. 607 & 612, Altamount Road, Cumballa Hills, for which the assessee has already claimed deduction u/s.54F for assessment year 2008-09 and allowed by the Assessing Officer in the assessment year 2008- 09. Therefore, the same cannot be considered once again in the assessment year 2008-09. This issue to be decided afresh by the Assessing Officer.
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