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2016 (4) TMI 703 - ITAT MUMBAI

2016 (4) TMI 703 - ITAT MUMBAI - TMI - Deduction deduction u/s 80RR - Held that:- As relying on earlier AY 2003-04 15% of the expenses are reasonable and be attributed to earning foreign income from outside India. The AO is directed to compute deduction u/s 80RR of the Act accordingly. The appeal of the revenue on this ground is dismissed with the above direction. - Decided in favour of assessee

Addition on account of ‘on money’ paid in respect of acquiring tenancy rights of heritage .....

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limitation. We find merit in the arguments of ld AR that that the property taken on tenancy in the earlier year was subsequently purchased with the prior permission of the departments and the certificate u/s 269UL(3) of the Act is placed at page no 28 of the paper book. In the lights of all these facts the addition as made by the AO is just a notional and hypothetical which lacks any basis and there is nothing on records to corroborate the action of the AO. In our opinion the order of CIT (A) w .....

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of Income Tax (Appeals)-40, Mumbai (Hereinafter called as the CIT(A)) for assessment year 1997-98. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that for calculating the eligible income u/s 80RR, the indirect expenses relatable to the assessee s foreign income be calculated on the number of days spent by the assessee abroad instead of in the same proportion which the foreign turnover has .....

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u/s 80RR of the Act , the indirect expenses relatable to the foreign income be calculated by taking the number of days the assessee spent abroad as against the proportion which the foreign receipts has to the total turnover by the AO whereas the second ground is against the deletion of addition of ₹ 1,20,00,000/- made by the AO on account of on money for acquiring the tenancy rights of heritage bunglow. 4. The brief facts are that the assessee filed his return of income on 29.10.1997 decla .....

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n connection with his professional engagements and the AO was of the view that the deduction u/s 80RR of the Act was to be calculated after considering all the expenses debited and charged to the income and expenditure account whether or not attributable to earning of foreign income. The assessee s gross receipts included ₹ 95,27,000/- as domestic receipts and ₹ 1,35,60,618/- from foreign receipts and thus the gross turnover of the assessee during the year was ₹ 2,30,87,618/- a .....

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0 para 34 of the assessment order. 5.1. On appeal before the CIT(A) by the assessee , the CIT(A) allowed the appeal by following the appeal order for the AY 1995-96 and 1996-97 and directed the AO to calculate the disallowance by taking the number of days the assessee stayed abroad to total number of days. 5.2. The ld AR at the outset pointed out that the case of the assessee was covered in his favour by a decision of the tribunal by own case in the ITA No 6008/Mum/2006 Assessment Year 2003-04 v .....

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similar issue was decided in favour of the assessee by the Tribunal vide order dated 21.10.2008. The relevant para No 7 of the said order is extracted below:- We have considered his submissions. We find that in ITA No.787/Mum/02 for A.Y.1995-96 as well as ITA No.3894/Mum/02 and 3658/Mum/02 for A.Y. 1998-99, the same issue was considered by the Tribunal and the Tribunal held that the allocation of expenses against the income eligible for deduction u/s 80RR should be on the basis of number of day .....

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the expenses can reasonably said to be attributable to earning of income outside India. The Assessing Officer is directed to compute deduction u/s 80RR accordingly. The appeal of the revenue is dismissed with the aforesaid directions. We, therefore, respectfully following the order of the coordinate bench of Mumbai, are of the view that 15% of the expenses are reasonable and be attributed to earning foreign income from outside India. The AO is directed to compute deduction u/s 80RR of the Act ac .....

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f constructed area of 5500 Sq. Fts with free hold land measuring 2500 per sq fts. It was also observed that in that area the stamp duty valuation as Govt rate was ₹ 8,000/- per sq. fts in respect of constructed area and ₹ 3200/- per sq. fts for the land. The market rate of the property as published in September edition of accommodation was ₹ 10,000/- per Sq. fts. Thus finally the AO came to the conclusion that the assessee might have paid ₹ 1,20,00,000/- as on money on th .....

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AO did not bring any materials or evidence on records to substantiate his action and addition made without any materials on records and was on based upon suspicion. Besides no incremating materials were seized during the course of search to corrobaorate of the action of AO and both documents agreement to sell and tenancy agreement pertained to other years and not the year under consideration. 6.2. The ld DR relied on the order of AO by submitting that the assessee paid on money to acquire inter .....

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hich is placed at page 28 of the paper book of the assessee. The ld counsel drew our attention to the various clauses in the said deed of assignment including the consideration for purchase of ₹ 13.32 Cr which is placed at page no 9 to 36 of the paper book. The Ld authorized representative for the assessee Shri Hero Rai finally submitted before us that the ld CIT(A) has passed by order after going into various legal and factual involved in the case of the assessee and did not require any i .....

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