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2024 (2) TMI 786 - ITAT AHMEDABADDelay in payment of both the employer’s and employees’ contributions to the PF authorities - HELD THAT:- The entire belated amount cannot be disallowed even as per the case of Checkmate Services (P) Ltd. (2022 (10) TMI 617 - SUPREME COURT]. In the interest of justice, we direct the AO to make 50% disallowance of the late payment. Thus, this ground of appeal raised by the Revenue is partly allowed. Miscellaneous expenses - As assessee company was a sick company during that period, it could not produce the details of miscellaneous expenses, AO made disallowance of 1/4th of the expenses for want of verification - CIT(A) appreciated the circumstances of the assessee case and held that the adhoc disallowance made by the AO without pointing out specific items which were not verifiable - HELD THAT:- Before us, the Ld.CIT-DR could not justify the deletion made by the Ld.CIT(A) and therefore, this ground raised by the Revenue is devoid of merit and, therefore, the same is dismissed. Disallowance of commission expenses - assessee-company did not provide any information on what basis commission was paid and also questioned whether TDS was deducted and also the commission expenses increased during this assessment year comparing with the earlier assessment years - HELD THAT:- CIT(A) held that the disallowance made by the AO without making any enquiries and without brining any material on record is unjustified. There is ample material to show that the sales were effected through selling agents and further the assessee also submitted proof of TDS to the commission agents, where major portion in US$ and exports of goods. Therefore, the disallowance made by the AO was deleted. Before us CIT-DR could not place before us any contra views or documents against the finding of the CIT(A). Therefore, this ground raised by the Revenue is devoid of merit and, therefore, the same is hereby dismissed. Nature of expenses - legal and professional charges - HELD THAT:- No legal infirmity in the order passed by the Ld.CIT(A), the expenditure incurred relating to sale of the immovable property and to be allowed as expense while calculating the Capital Gain, therefore, this ground raised by the Revenue is dismissed. Disallowance of bad and doubtful debts - CIT(A) had taken note of the shifting of assessee’s operations from Kolkata to Ahmedabad and closure of old plant, which was sustaining losses and the circumstances where there is no likelihood of cost effective recovery of debts - HELD THAT:- No infirmity in the order passed by the Ld.CIT(A), since in the case of TRF Ltd.[2010 (2) TMI 211 - SUPREME COURT] held that it is not necessary for the assessee to establish that debt, in fact, has become irrecoverable, it is never if bad debt is written off as irrecoverable in accounts of the assessee. Respectfully following the ratio laid down by the Hon’ble Apex Court, the above ground raised by the Revenue is devoid of merit and the same is hereby dismissed. Capital gain computation - Cost of acquisition of land - AO while calculating the capital gain has not accepted the fair market value of the land as on 01/04/1981 as Rs. 1.25 crores as claimed by the assessee, on the ground that no valuation report from Govt. Approved Valuer was submitted by the assessee - CIT[A] accepted the assessee’s submission of the Government Approved Valuer’s Report, and directed the AO to adopt the fair market value of the land as on 01/04/1981 at Rs. 1,17,40,000/- for the purpose of computing the capital gain - HELD THAT:- No infirmity in the order passed by the CIT(A). AO without making any reference u/s. 55A of the Act, suo moto estimated the cost of the land as on 01/04/1981 at Rs. 25 lakhs, which is legally not permissible under the Act. Whereas the assessee has submitted Government Approved Valuer’s Report valuing the land as on 01/04/1981 at Rs. 1,17,40,000/- for computing the capital gains. Thus, ground raised by the Revenue is devoid of merit and the same is hereby dismissed. Determination of value u/s 50C - Validity of order of CIT(A) directing the AO to recalculate the capital gain on sale of land taking total value of property of Rs. 6.05 Crs. after deducting value of Rs. 1.75 Crs. towards Building, Plant & Machinery - HELD THAT:- Section 50C provides that where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted shall be deemed to be the full value of the consideration received or accruing as a result of such transfer, for the purpose of section 48 of the Act. Plain reading of the section makes it clear that the valuation is not only for land or building or both. In this case, there is no reference about the under valuation of the building and therefore land alone is valued at Rs. 6.05 crores by the State Government Authority, therefore the CIT [A] is not correct in holding that 50C valuation is not applicable to building. The assessee has not produced the copy of the Valuation Report to ascertain the value determined towards land alone or also building, plant & machinery. Therefore, the direction given by CIT[A] is against the provision of law and liable to be reversed and the order of the Ld AO is to be restored, but the cost of acquisition as on 1-4-1981 to be adopted. Thus, the Grounds of Appeal raised by the Revenue is allowed.
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