2018 (3) TMI 665 - ITAT DELHI

Capital gain computation - adoption of correct sales considerations - Held that:- As in view of the provisions of Section 50C of the Act and the law on this aspect, the findings of the Ld. CIT(A) adopting the sales consideration at ₹ 25,00,000/- and then reduce the indexed cost of acquisition does not suffer any irregularity or illegality and does not warrant any interference.

Disallowance of deduction of registration expenses u/s 48 - Held that:- No obligation on the part of the seller to meet the registration expenses. Except the copy of the pay order dated 2.8.2006 no document is produced before us to show that the assessee is under any legal or contractual obligation to meet the registration expenses in respect of the land sold by them. Even the pay order does not show that the same was issued at the cost of the assessee. Unless it is proved that the assessee actually incurred this expenditure, it is not possible to give a finding that the case of the assessee is covered under section 48 (i) of the Act. Since it is a fact to be verified, conveniently at the end of the learned AO, we deem it just and proper to set aside the ground No.1 of Cross Objection to the file of the AO for verification of the fact as to whether the assessee incurred this expenditure or not.

Disallowance of the long term capital loss - Held that:- We uphold the conclusions reached by the learned CIT(A) that this sale transaction is within the legal framework and cannot be held as illegal. Holding so, we dismiss this ground of appeal.

Membership/subscription fees paid on behalf of Mr. B.K. Modi, the Chairman, the assessee incurred the said expense and paid the amount to Clinton Global Initiative, Associated Chamber of Commerce and Industries of UP, Asia Business Council, Conference Board Inc. etc. - claim allowed as relying on assessee' own case

Travelling expense incurred by the assessee - Held that:- No dispute that FBT is levied and paid in respect of the travel expenses. Learned CIT(A) recorded that it was pleaded before him that considering the FBT paid, the disallowance, if any, should be to the extent of ₹ 18,87,214/- only. However, learned CIT(A) restricted the disallowance to ₹ 5 lacs only on verification of the record. The reasons given by the learned CIT(A) is that certain bills and vouchers of small amounts are not verifiable. However, no details of the unverifiable expense are noted. Without reference to the particular expenses that remained unverifiable, we are of the considered opinion that ad hoc disallowance is not permissible. With this view of the matter, we dismiss the ground of appeal and allow the ground of Cross Objection and delete the ad hoc disallowance of ₹ 5 lacs.

Enhancement of long term capital gains earned on the sale of shares of M/s Harjas Logic System Pvt. Ld - Held that:- The expression full value of the consideration for sale cannot be construed as the market value but as the price decided upon by the parties to the transaction and the Ld. AO does not have jurisdiction to substitute the consideration received with any other higher value, in the absence of any material falsifying the contention of the assessee on the aspect of actual consideration received.

It is not open for the Ld. AO to adopt different standards for the shares sold merely depending upon the NAV by accepted the sale for consideration where NAV is less than the sale consideration while rejecting the sale consideration where NAV is higher. There is no denial on the submission of the assessee that if NAV of all shares is substituted for sale consideration, it would be observed that the assessee has sold investments at value higher by ₹ 3,03,64,980/-. This approach of the Ld. AO cannot be accepted and the Ld. CIT(A) rightly corrected the same

Contribution made by the assessee to the International Fiscal Association is allowable u/s 37