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2014 (12) TMI 147 - BOMBAY HIGH COURTPro-rate disallowance on sale of land – Lands purchased from unexplained sources - Whether the Tribunal was justified in deleting the disallowances made by the AO on pro-rata basis in respect of costs of sales of land made by the assessee by invoking proviso to Section 69C of the Act – Held that:- The Assessee is in the business of real estate and land development – the AO was of the opinion that the assessee was not an investor, but he traded in lands - the assessee was given relief because the AO could not have reassessed the income beyond a period of six assessment years immediately preceding the AY, relevant to the previous year in which the search was conducted - the Tribunal has rightly understood the factual matrix and concluded that when the extent of five transactions are prior to 1-4-1997, and three transactions have not been interfered with and sent back to the file of the AO for verification, then what would be the governing factor is the year in which the expenditure, which is unexplained, can be deemed to be income of the Assessee – assessee has not incurred any expenditure in the financial year in question - the plots were acquired admittedly prior to 1-4-1997 - It is only the pro-rata deduction which was claimed and in the form of adjustment against this purchase price as the plots were sold - the primary condition which has to be fulfilled so as to apply section 69C was not at all fulfilled – relying upon The Commissioner of Income Tax Versus M/s. Tips Industries P. Limited [2010 (1) TMI 50 - BOMBAY HIGH COURT] - thus, the order of the Tribunal is upheld – Decided against revenue.
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