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2015 (5) TMI 905 - ITAT BANGALORE

2015 (5) TMI 905 - ITAT BANGALORE - TMI - Difference between the income declared - Disallowance u/s 40A(3) OR Section 37(1) - assessee has also challenged the jurisdiction invoked under Section 153C - Held that:- it would be in the interest of justice and equity if the matter of assessment is restored to the file of the Assessing Officer, who shall consider the aforesaid issues afresh and pass orders in accordance with law after affording the assessee adequate opportunity of being heard and to f .....

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the order of assessment afresh being uninfluenced by any of the earlier orders and shall conclude the proceedings in accordance with law. It is ordered accordingly. - Decided both in favour of assesse and revenue for statistical purposes. - I.T.A. No.1458/Bang/2012, C.O. No.64/Bang/2013, S.P. No.177/Bang/2014 - Dated:- 24-4-2015 - Shri N.V. Vasudevan And Shri Jason P. Boaz JJ. For the Appellant : Shri Farhat Hussain Qureshi, CIT-III (D.R) For the Respondent : Shri V. Srinivasan, C.A ORDER Per Sh .....

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and works contract, filed his return of income for Assessment Year 2008-09 on 14.11.2009 declaring income of ₹ 28,91,040. The income returned related to the profit from sale of land measuring 2.81 acres at Kodialbail village, (Bejai Automatrix Land) at Mangalore for a declared consideration of ₹ 3,55,65,000 which was received over three financial years ending with the year under consideration. After claiming expenditure of ₹ 3,22,03,455 in connection with the sale and administ .....

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regarding the transaction of 2.81 acres of land at Kodialbail village (Bejai Automatrix Land) mentioned above. Based on the aforesaid incriminating documents pertaining to the assessee, notice under Section 153A rws 153C of the Act was issued to the assessee on 21.10.2010. In response thereto, the assessee filed a return of income on 29.6.2010 declaring total income of ₹ 2,13,41,040. In the course of assessment proceedings, the assessee filed a revised return of income declaring total inc .....

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ome of the assessee was determined at ₹ 3,34,18,880 in the order of assessment for Assessment Year 2008-09. 2.3 Aggrieved by the order of assessment for Assessment Year 2008-09 dt.24.12.2010, the assessee preferred an appeal before the CIT (Appeals) - VI, Bangalore. The learned CIT(A) disposed off the assessee's appeal vide order dt.23.8.2012 allowing the assessee partial relief. While disposing off the appeal, the learned CIT(A) has recorded a finding that the income from the land tra .....

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the learned CIT(A) has also deleted the protective addition towards capital gains as she held that the income should be assessed under the head business . The learned CIT(A) also held that, out of the expenses of ₹ 3,22,03,485, disallowance of ₹ 1,84,50,000 requires to be made under Section 40A(3) of the Act, since the said amount was claimed as payments to tenants in cash and therefore it amounted to violation of the provisions of Section 40A(3) of the Act. 3. Aggrieved by the order .....

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T (Appeals) erred in law and in fact in directing to compute the business income after disallowing Rs.;1,84,50,000 out of the expenses of ₹ 3,22,03,445 claimed thereby confirming the total income at ₹ 2,13,81,040 as against the total income ofRs.2,33,74,876 declared in the revised return of income. 4.1 The assessee has also filed Cross Objections in respect of the impugned order of the CIT (Appeals) for Assessment Year 2008-09 which are as under :- 1. The orders of the authorities be .....

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ection, your respondent / cross-objector humbly prays that the appeal filed by the appellant A.O. in respect of the relief granted by the CIT (Appeals) may be dismissed and grounds of the cross-objection may be allowed and justice rendered. 4.2.1 In the course of proceedings before us, the assessee has also urged additional grounds of C.Os which are as under :- 1. The order of assessment passed under Section 153C rws 143(3) of the Act is bad in law and void-ab-initio in as much there was no mate .....

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lowed and justice rendered. 4.2.2 The learned Authorised Representative submitted that these additional grounds (supra) were not urged before the learned CIT(A) inadvertently. It is submitted that these grounds do not involve any investigation of facts other than which are already on record and being pure questions of law ought to be admitted and disposed off in the interest of justice and equity. We have perused and considered the submissions put forth by the learned Authorised Representative, .....

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on 14.11.2009. In the said return of income, the assessee had computed his income from the sale of land at ₹ 28,91,040 which is at page 6 of the impugned order of the learned CIT(A) and is extracted hereunder :- 1. Total Receipts Rupees A.Y. 2006-07 2,05,65,000 A.Y. 2007-08 50,00,000 A.Y. 2008-09 1,00,00,000 Total Receipts 3,55,65,000 2. Total Payments : A Payments to Tenants 1,84,50,000 B Land Development Expenses (AY 2006-07) 78,43,455 C Payments to Tenants (2003-04) 30,10,000 D Payment .....

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ring income of ₹ 28,91,040 and the return of income filed on 29.6.2010 in response to notice issued under Section 153A rws 153C of the Act declaring income of ₹ 2,13,41,040 appears to be the sum of ₹ 1,84,50,000 claimed as payments to tenants. It is seen that subsequently, the assessee filed another return of income declaring an income of ₹ 2,33,74,836 in which income from the sale of lands was offered under the head Capital Gains. Though the Assessing Officer has rejecte .....

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ains. In the factual matrix, we find that the assessee's business is that of purchase and sale of land and therefore the income is assessable under the head business only. 5.4 In respect of the original return of income for Assessment Year 2008-09 filed on 14.11.2009 declaring income of ₹ 28,91,040 and the return filed on 29.6.2010 in response to notice under Section 153A rws 153C of the Act wherein the income declared is ₹ 2,13,41,040, we find that the difference between the inc .....

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