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2015 (10) TMI 1598 - ITAT DELHI

2015 (10) TMI 1598 - ITAT DELHI - TMI - Disallowance u/s 40A(3) - Held that:- The total cost of purchases of the land + the amount incurred for stamp duty recorded in page 5 of the assessment order, is the opening stock for the impugned AY. As the issue before us is the disallowance u/s 40A(3) of the Act and as the assessee has not claimed any expenditure during the year, the question of upholding disallowance u/s 40A(3) of the Act does not arise. - Decided in favour of assessee.

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The AO has adopted a cost of ₹ 1,69,21,360/-. The reason given by the AO for such deduction is vague and devoid of merit. - Decided against revenue. - ITA No. 3483/Del/2012, ITA No. 412/Del/2011, ITA No. 816/Del/2011 - Dated:- 1-6-2015 - H. S. Sidhu, JM And J. Sudhakar Reddy, AM,JJ. For the Appellant : Shri Pradeep Dinodia, CA & Shri RK Kapoor, CA For the Respondent Rep by: Shri J P Chandrakar, Sr. DR ORDER Per J. Sudhakar Reddy, AM. ITA 816/Del/2011 and ITA 412/Del/2011 are Cross App .....

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me Tax Act, 1961. (the Act). Ground no.2 is against deletion made by the First Appellate Authority on account of deduction of purchase cost by the AO from that claimed by the assessee. 4. The Revenue appeal is on the issue whether the AO was right in charging notional interest. 5. We have heard Shri Pradeep Dinodia, along with Sh RK Kapoor, the Ld.Counsel for the assessee and Shri J.P.Chandraker, Ld.SR.DR on behalf of the Revenue. 6. We first take up the Revenue's appeal. 7. On the first iss .....

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of the First Appellate Authority on this issue. 8. The Ld.DR submitted that the assessee has not furnished particulars of the purchases made, the mode of payment etc. The Ld.Counsel for the assessee submitted that entire purchases were made in the earlier year and the mode of payment was by way of crossed cheque. He also drew attention of the Bench to page 5 of the assessment order to demonstrate that the total cost of purchases of the land + the amount incurred for stamp duty recorded in page .....

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have considered the submissions of the assessee and findings of the AO in the assessment order. Regarding the computation of loss on sale of land, it is seen from the submissions made by the assessee and also from the observations of the AO that the purchase price of land, subject matter of sale, was ₹ 1,88,53,629/-. The AO has disregarded a sum of ₹ 19,32,269/- from the purchase price which represent the amount payable to the consolidator. There is no doubt that the assessee paid f .....

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a cost of ₹ 1,69,21,360/-. The reason given by the AO for such deduction is vague and devoid of merit. Thus we uphold the finding of the First Appellate Authority and dismiss this ground of Revenue. 10. In the result ITA 816/Del/11 is dismissed. 11. Now we take up assessee's appeal. 12. After hearing rival contentions, we are of the considered opinion that notional interest cannot be charged as there is no such provision in the Act. At best the AO would have disallowed interest claime .....

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