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2016 (4) TMI 1115

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..... therefore, the cost of acquisition of land was taken as Nil and thereby he calculated long term capital gain to the tune of ₹ 1 Crore. The learned CIT(A), on the other hand, apportioned the written down value of land and building as on 31.3.2008 between land and building on the same ratio on which Assessing Officer had apportioned the sale consideration between land and building and therefore, cost of acquisition of land was calculated and after applying indexed of cost of acquisition long term capital gain was calculated. We find that learned CIT(A) has taken a reasoned view and has rightly apportioned the WDV as on 31.03.2008 between land and building and we do not find any infirmity in the same. - I.T.A No. 753(Asr)/2013, I.T.A No. 477 (Asr)/2013 - - - Dated:- 18-2-2016 - Sh. A. D. Jain, Hon ble Judicial Member And Sh. T. S. Kapoor, Hon ble Accountant Member For the Appellant : Sh. M. A. Mir ( Cost Accountant ) For the Respondent : Sh. R.K. Sharda ( DR ) ORDER Per T. S. Kapoor (AM) These are cross appeals filed by assessee as well as by Revenue against the order of learned CIT(A), Jammu, dated 29.04.2013 for the Asst. Year 2009-10. 2. The grou .....

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..... ssee. The learned AR submitted that the learned CIT(A) had issued order on 29.04.2013 and which was handed over to the counsel of assessee on 29.04.2013 and the counsel returned the same to the assessee on 15.05.2013. On that date one of the employee of the firm received the order and kept the order somewhere and assessee was not having any knowledge about such order and on 1st December, 2013 the assessee some how found that order and filed the appeal and that is why a delay of 168 days has occurred. The learned AR in this respect submitted that assessee has filed a duly sworn affidavit in this respect. In view of the above, it was prayed that delay in filing of the appeal may be condoned. 4. The learned DR, however objected to condonation of delay, However, keeping in view the substantial justice we condoned the delay in filing of appeal and learned counsel was allowed to proceed on the matter. 5. Inviting our attention to the facts of the case, the learned AR submitted that assessee was a partnership firm engaged in the business of civil construction. The case of the assessee was selected for scrutiny. During the assessment proceedings the Assessing Officer made various add .....

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..... had taken this figure of opening stock on the basis of closing stock as determined by Assessing Officer himself and therefore, assessee had revised return of its income for Asst. Year 2008-09, however, Assessing Officer did not allow such claim of assessee and assessment in Asst. Year 2008-09 was completed at the original figure of closing stock. He submitted that in the present year the Assessing Officer has again made addition of the same difference in closing stock and opening stock which amounts to double addition as in the earlier year the effect has already been taken into account. Therefore, it was argued that addition in this year should be deleted. 9. Arguing upon the Ground No.3, regarding confirming the amount on account of site expenses the learned AR submitted that the Assessing Officer had made an addition of ₹ 2,40,490/- which the learned CIT(A) had restricted to 1/3 of such expenditure whereas the leaned CIT(A) should have allowed the total relief as all the expenses were related to business of the assessee. 10. Arguing upon the ground No.4, regarding confirmation of addition of ₹ 7,50,000/- on account of disallowance of depreciation claimed on th .....

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..... and therefore, the CIT(A) had invoked Section 14A to disallow the entire expenditure. The aforesaid submission does not find any specific and clear narration in the reasons or the grounds given by the CIT(A) to, make the said addition. Possibly, the CIT(A), though it is not argued before us, had taken the stand that the respondent- assessee had made investment and expenditure was incurred to protect those investments and this expenditure cannot be allowed under Section 14A. 14. On the issue whether the respondent-assessee could have earned dividend income and even if no dividend income was earned, yet Section 14A can be invoked and disallowance of expenditure can be made, there are three decisions of the different High Courts directly on the issue and against the appellant-Revenue. No contrary decision of a High Court has been shown to us. The Punjab and Haryana High Court in Commissioner of Income Tax, Faridabad Vs. Mis. Lakhani Marketing Incl., ITA No. 970/2008, decided on 02.04.2014, made reference to two earlier decisions of the same Court in CIT Vs. Hero Cycles Limited, [2010] 323 ITR 518 and CIT Vs. Winsome Textile Industries Limited, [2009] 319 ITR 204 to hold that Sec .....

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..... t is subjected to dividend distribution tax. 16. What is also noticeable is that the entire or whole expenditure has been disallowed as if there was no expenditure incurred by the respondent-assessee for conducting business. The CIT(A) has positively held that the business was set up and had commenced. The said finding is accepted. The respondent- assessee, therefore, had to incur expenditure for the business in the form of investment in shares of cement companies and to further expand and consolidate their business. Expenditure had to be also incurred to protect the investment made. The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the Assessing Officer and has also not been doubted by the CIT(A). 17. In these circumstances, we do not find any merit in the present appeals The same are dismissed in limine 16. As we have observed that whether there was any exempt income in the year under consideration or not is not coming out from the material on record, therefore, it is appropriate to ascertain if there was any exempt income at all and if there is no exempt income then following the decision of Hon .....

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..... next year and at the time of sale the building was occupied by security forces, therefore, it cannot be said to have been utilized for business purposes. Before us also the assessee could not bring out anything against the findings of Assessing Officer and learned CIT(A), therefore, keeping in view the facts and circumstances of the case Ground No. 4 is dismissed. 20. As regards Ground No.5 relating to disallowance of medical expenses, we find that learned CIT(A) has restricted the disallowance from ₹ 1,50,000/- to ₹ 30,000/- only which is reasonable sustenance of addition, keeping in fact that assessee could not furnish any break up of these expenses as well as supporting bills. In view of the above, Ground No.5 is also dismissed. 21. Now coming to appeals filed by Revenue, we find that the Revenue is aggrieved with the deletion by learned CIT(A) which the Assessing Officer has made on account of disallowance of medical expenses. We find that learned CIT(A) had given relief only to the extent of ₹ 1,20,000/- whereas in the grounds of above appeal the Revenue has taken the figure of disallowance at ₹ 1,50,000/-. We find that learned CIT(A) has upheld .....

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