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2015 (11) TMI 483 - ITAT DELHI

2015 (11) TMI 483 - ITAT DELHI - TMI - Addition on account of compensation for re-acquiring the rights of plots of land - CIT(A) deleted the addition - Held that:- FAA correctly held that, the compensation paid by the assessee is not to reacquire any rights. He recorded a fact that, when the advance is received for sale of a plot, it was not treated as sale of plot, in the books of the assessee. In the absence of receipt of full sale consideration, the assessee has not treated the sale transacti .....

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on for attending a formal meeting and dinner in connection with promotion of the company. He held that the expenses incurred on the travel of the wife of the Director, was for the benefit of the company and promoting its good will. This factual finding of the First Appellate Authority could not be controverted by the Ld.Sr.D.R - Decided in favour of assessee.

Allowability of depreciation - A.O. disallowed the depreciation on the ground that the vehicles were registered in the name of .....

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hat the vehicles are not registered in the name of the company, but in the name of the Directors. Such disallowance cannot be made - Decided in favour of assessee.

Addition claimed as agricultural income - CIT(A) deleted the addition - Held that:-he First Appellate Authority gives the factual finding that the assessee has produced the evidences of agricultural income earned by it and the bills for incurring of the expenditure. Further he records that one company by name VTPL, which wa .....

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t:- The First Appellate Authority held that the fine/penalty in question, was incurred in relation to breach of a civil contract and not for violation of any provisions of law. He held that the expenditure is incidental to the business of the assessee and as the assessee is in the business of real estate and the compensation is related to its stock in trade, the expenditure is not capital in nature. He deleted the penalty. In our view the order of the First Appellate Authority on this issue does .....

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professionals and depreciation on foreign cars admittedly is not allowable. The source from which an asset is purchased is not relevant. Hence we confirm the order of the Ld.CIT(A), wherein the penalty levied u/s 271(1)(c) levied by the A.O. as a claim of depreciation on foreign cars is confirmed. - Decided against assessee. - ITA No. 2160/Del/2010, ITA No. 1288/Del/2012, Cross Objection No. 212/Del/2012 - Dated:- 8-10-2015 - Shri G. C. Gupta, Vice President And Shri J. Sudhakar Reddy, Accountan .....

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er of the Ld. CIT(Appeals) is not correct in law and facts. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting addition of ₹ 1,35,000/- on account of compensation for re-acquiring the rights in plots whereas such expenditure was incurred to earn substantial profits in future by way of repurchasing its own assets. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting addition of ₹ 1, .....

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f wife would help the assessee to take decisions whereas his wife is not at all conversant with highly technical architectural designs and details of construction projects for which the assessee had gone abroad and whereas his wife has not been entrusted any such responsibilities in the assessee's own organization wherein there is well organized in-house specialized architectural Department. 5. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleti .....

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e whereas no evidence was produced by the assessee before AO to substantiate the same as agricultural income and voucher of petty expenses of ₹ 45,000/- out of claim of expenses at ₹ 5,00,000/- was produced before AO. In doing so, Learned CIT(A) has not taken recourse to provisions of Rule 46A of Income tax Rules 1962. 7. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in holding income of ₹ 10,23,006 /- claimed by the assessee as agricu .....

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wal, the Ld.Sr.Counsel on behalf of the assessee. 3. After hearing rival contentions, perusing material placed on record, orders of lower authorities, case laws cited, we hold as follows. 4. Ground nos. 1 and 8 are general in nature. 5. Ground no.2 is against deletion of an addition of ₹ 1,35,000/- made by the Ld.CIT(A) on account of compensation for re-acquiring the rights of plots of land. The assessee received advance for the sale of plots. In certain cases the sale consideration is pai .....

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ty held that, the compensation paid by the assessee is not to reacquire any rights. He recorded a fact that, when the advance is received for sale of a plot, it was not treated as sale of plot, in the books of the assessee. In the absence of receipt of full sale consideration, the assessee has not treated the sale transaction as complete. Thus, when no asset is sold by the assessee, the question of reacquiring the same does not arise. The Ld.CIT(A) records that the theory of purchasing something .....

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mal meeting and dinner in connection with promotion of the company. He held that the expenses incurred on the travel of the wife of the Director, was for the benefit of the company and promoting its good will. This factual finding of the First Appellate Authority could not be controverted by the Ld.Sr.D.R. Hence we uphold the same and dismiss this ground of the Revenue. 7. Ground no.5 is on the issue of allowability of depreciation. The A.O. disallowed the depreciation on the ground that the veh .....

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wance is made merely on the ground that the vehicles are not registered in the name of the company, but in the name of the Directors. Such disallowance cannot be made. In the result this ground of the Revenue is dismissed. 9. Ground no.6 is against deletion of an addition of ₹ 10,23,600/- claimed as agricultural income by the assessee. The claim of the assessee of having agricultural income was partly disbelieved by the A.O. for the reason that, vouchers of agricultural expenses were submi .....

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tracted by the Ld.CIT(A), to demonstrate that the assessee has been earning agricultural income for all the earlier A.Ys and that this has been accepted by the Revenue. These factual findings could not be controverted by the Ld.Sr.D.R. Hence we uphold the finding of the First Appellate Authority and dismiss ground nos. 6 and 7 of the Revenue. 10. In the result this appeal by the Revenue is allowed in part. 11. We now take up the appeal for the AY 1998-99 in ITA 1288/Del/2012 and C.O. no.212/Del/ .....

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of the case are brought out at paras 4 to 4.5 of the order of the Ld.CIT(A), which are extracted for ready reference. 4. Facts of the case and argument of the assessing officer:- 4.1 Appellant filed a return of income declaring net assessable loss of ₹ 12,25,884/- and after adjustment of brought over loss of earlier years amounting of ₹ 81,35,576/-, claimed net carried over loss amounted to ₹ 93,56,4601-. The assessment however was completed vide order dated 29.03.2001 determin .....

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d. 4.3 The assessing officer levied a penalty u/s 271 (1) (c) of the Income Tax Act, 1961 of ₹ 7.49.000/- vide his order dated 30.10.2006 which was calculated on the following additions made to the returned income and finally sustained by the order of Commissioner of Income Tax (Appeals) and Tribunal. 1. Disallowance for depreciation ₹ 1,40,000/- 2. Penalty charges paid by the appellant ₹ 20,00,000/- 4.4 Appellant filed appeal against the order of penalty which was decided agai .....

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failed to give any explanation in support of its contention against imposition of penalty. The assessing officer shall ascertain whether there was carried forward business loss from earlier years which is to be set off against current year Income while computing the penalty, if imposable upon the appellant". 4.5 The assessing officer issued a notice u/s 271 (1) (c) of the Income Tax Act, 1961 on 12.10.2009 against which the appellant filed its reply on 16.11.2009 and explained the circumsta .....

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₹ 20 lakhs, which is a liability incurred towards, non performance within the stipulated time of a specific Clause in the Memorandum of Understanding. As far as the disallowance of depreciation on foreign car, the First Appellate Authority sustained the penalty. 14. After hearing rival contentions, we hold as follows. 15. The assessee has entered into an agreement dt. 30.9.1996 with M/s Vimco Ltd. As per this agreement, the assessee had to complete acquisition of agricultural land within c .....

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