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2023 (1) TMI 1158 - AT - Income TaxAddition of Long-term Capital Gain on sale of industrial plot - Real owner - owner of the property was Director of the assessee company - benefit of indexation capital gain charged only in the hands of owner or on the name of lender for purchases of HSIDC - whether ownership cannot be transferred to a person without consideration and company cannot become owner who has not made any payment to director? - HELD THAT:- As conveyance deed was signed by the assessee through its director Shri Surender Kumar Gupta. It is also not in dispute that the sale consideration was received by the assessee. In our considered opinion, no purchaser would pay a consideration of Rs. 90 lakhs unless he is satisfied with the title of the property. The title was in the name of the assessee though the assessee has given a different color by referring to Supplementary Agreement. Ownership was changed from Shri Surender Kumar Gupta to the assessee and hence there should not be any dispute in so far as who is the seller of the property is. Facts on record clearly demonstrate that the seller of the property is the assessee and the property has been sold by Shri Surender Kumar Gupta in the capacity of being the director of the assessee company - we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 2 with its sub-grounds is dismissed. Disallowance made of claim of bad debts - short payment received on full and final settlement of debts with M/s Park Non-Woven Pvt. Ltd. the debtor of the company - HELD THAT:- Assessee has written off provision for bad debt and has credited the account of Park Non Woven Pvt Ltd by the said provision. The assessee has clearly written off provision for bad and doubtful debt which is not allowable and interestingly, on 31.03.2015, outstanding debit balance in the account of Park Non Woven Pvt Ltd was Rs. 90,74,626/- from which provision was written off to the tune of Rs. 17 lakhs and balance carried forward was Rs. 51,03,331/-. After provision for bad debt, the assessee has received entire outstanding amount of Rs. 51,03,331/-. We fail to understand, if the debtor was not in a position to pay debt as on 31.03.2015, then how the assessee has received Rs. 51 lakhs after write off. Facts on record clearly go against the assessee and, therefore, Ground No. 3 is, accordingly, dismissed. Disallowance being excess paid which was excise duty written off - HELD THAT:- The undisputed fact is that the assessee was having credit balance with the Excise Department - As the assessee was left with no stock, the assessee could not claim the set off of the said Excise balance and, therefore was left with no choice but to write off the same. We do not find any error in this write off as the same has to be allowed as business loss. The Assessing Officer is directed to allow the claim - Ground No. 4 is, accordingly, allowed. Reversal of excise duty as sales return and service tax - HELD THAT:- We find that on 20.08.2014, there is a reversal entry of sales return amounting to Rs. 2,61,180/- and on 07.01.2015, there is a debit of Rs. 1,36,723/- being service tax transferred to closure of factory. As per Exhibit 104, the assessee has paid basic Excise Duty in the month of May 2014 and as per Exhibit 106 which is ledger account of service tax, the assessee has credited Excise Duty RG -23A Part 2 being balance transfer of closure of factory. Copy of ledger account show that the amount debited earlier has been reversed during the year under consideration. In our considered opinion, when the amounts were debited, they were claimed as expenditure and since now the entries have been reversed, the same become income of the assessee. No reason to interfere with the findings of the ld. CIT(A). Ground No. 5 is dismissed.
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