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2018 (11) TMI 549 - ITAT INDOREDenying the claim of deduction u/s 54F - investments in the purchase of flat at Mumbai - AO disallowed the claim of the assessee on the ground that assessee was required to deposit the entire sale consideration in the scheme of deposits in capital gains account on or before the due date of filing of return of income - assessee did not deposit the said amount and as such the provisions of sec. 54F are not applicable - whether the assessee would be entitled for benefit of section 54F of the Act even he does not deposit the sale consideration as contemplated u/s 54F(4)? - Held that:- In the present case, the assessee purchased new asset on and had transferred the original asset on 8/01/2008. As per Section 54F(1) the exemption would be available if the assessee purchased the residential house within two years after the date when transfer took place. As per the judgment of Hon'ble Karnataka High Court in K. RAMACHANDRA RAO [2015 (4) TMI 620 - KARNATAKA HIGH COURT] the provisions of section 54F(4) would not be attracted in the event if the assessee has purchased or constructed the residential house within the period prescribed under section 54(1) of the Act. In the case in hand, there is no dispute with regard to the fact that the assessee had purchased within two years [the period prescribed u/s.54(F(1)] a new asset on 05/10/2009 from the date of transfer of the original asset. The Revenue has not cited or placed on record any contrary judgment by the Hon'ble Jurisdictional High Court or Hon'ble Supreme Court. Therefore, we hereby set aside the impugned order and direct the AO to re-compute the assessed income after granting the benefit of section 54F of the Act to the assessee. Addition in respect of the payments made by cash credit card - A.O. disallowed expenditure on the ground that expenses incurred do not relate to business of company - Held that:- Director of the company incurs expenditure for and on behalf of the company but for allowance of such expenditure, it is incumbent upon the assessee to prove the nature of expenditure and purpose of the expenditure and correlate with the business of the company. In the present case, the assessee has merely made a bald statement. The ledger account belonging to the company so submitted speaks of cash credit which requires verification by the assessing officer, whether such expenditure had any link with the business of the company in which the assessee is a Director. We therefore, set aside this issue to the file of the A.O. for a limited purpose to verify the link between the expenses and the business of the company where the assessee is the Director. In the event if the A.O. finds that there is some relation with the business of the company and expenditure incurred by the assessee, he will allow such expenses and delete the addition to that extent - Assessee’s appeal are allowed for statistical purpose.
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