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2016 (7) TMI 57 - ITAT BANGALORE

2016 (7) TMI 57 - ITAT BANGALORE - TMI - Disallowance of 20% of the claim of expenditure not fully supported by vouchers - Held that:- Though, the AO does say that the expenditure was not fully supported, he has not pointed out even a single specific instance. His conclusion that there were some personal elements in the claim of expenditure is also not supported by any specific findings. We find the disallowance to have been made purely on surmises. Such disallowance stands deleted. - Decided in .....

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g the cost of the shed in its balance sheet. The said HUF was also assessed to tax. When all these are seen together, in our opinion, it is clear that the building was owned by HUF, whereas the land was owned by the assessee. In such a situation, for computing the capital gains the assessee could not have deducted the cost of construction, since the construction did not belong to the assessee. Nevertheless, we find that the ld., CIT(A) in all fairness, had directed the AO to give the benefit of .....

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hip of agricultural property would not transform itself into income. The claim of assessee was that it had earned an agricultural income of ₹ 4,85,000/- from 8 acres of Coffee plantation. Assessee was not able to produce any evidence except for a certificate from the Revenue Inspector, Srimangala Hobli which gave details of crops grown. Assessee did not show anything to prove the sale of agricultural produce or receipts there from. In such situation, we cannot fault the ld. AO for followin .....

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ed to ₹ 3,77,000/-. - Decided in favour of assessee in part - ITA No.786(BNG.)/2015 - Dated:- 7-4-2016 - SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE, K, JUDICIAL MEMBER For The Assessee : Shri S. Venkatesan, CA For The Revenue : Dr. P.K.Srihari, Addl.CIT ORDER PER SHRI ABRAHAM P GEORGE, AM; In this appeal the grounds taken by the assessee reads as under; 1. The orders of the authorities below in sofaras they are against the assessee, are opposed to law, equity, weight o .....

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s against the sum of Rss.7,88,000/- adopted by the assessee under the facts and in the circumstances of the assessee s case. 3.1 The addition sustained by the CIT(A) is contrary to the evidence filed before him and the inferences drawn are without any evidence in as much as, without their being any building, the assessee would not have derived rental income, which was offered to tax and the assessee has been paying power charges etc. to run the factory initially before it was let out and disallo .....

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waiver with the Hon ble CCIT/DG, the assessee denies himself liable to be charged to interest u/s 234A, 234B and 234C of the Act, which under the facts and in the circumstances of the assessee s case and the levy deserves to be cancelled. 6. For the above and other grounds that may be urged at the time of hearing of this appeal, your assessee humbly prays that the appeal may be allowed and justice rendered and the assessee may be awarded costs in prosecuting the appeal and also order for the ref .....

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expenditure were of such nature in which there could no personal element. However, the ld.CIT(A), as per the ld. AR failed to appreciate this and had confirmed the order of the AO. 3. Per contra, ld. DR supported the order of the authorities below. 4. We have perused the material and perused the material on record. The expenditure on which disallowance of 20% was made is reproduced hereunder; a. Labour and Salary Rs.1,60,800 b. Postage and forwarding expenses ₹ 3,210 c. Repais and maintena .....

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2.1 are allowed. 5. In support of ground no.3 & 3.1 the ld. Counsel submitted that assessee had declared capital gains on sale of a plot bearing no.265S, in Hebbal Industrial Area, Kasaba Hobli, Mysore District. As per the ld. AR, the assessee had correctly computed the capital gains as under; a. Sale consideration Rs.24,00,000 less a commission ₹ 48,000 b. Indexed cost of acquisition 788200*632/223 Rs.22,33,822 Capital Gains ₹ 1,18,178 Submission of the ld. AR was that the AO d .....

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t was acquired by the assessee from KIADB on 26-10-1990 for establishing printing press. As per the ld. AR, the construction of the factory shed was based on plan which was submitted and approved by Dy. Development Officer, KIADB, Zonal Office, Mysore on 25-06- 1993. The ld. AR stated that a Chartered Engineer had certified the existence of building and fixed the value of the building at ₹ 2,71,000/- based on his visit to the premises on 06-12-1996. The ld. AR also relied on copies of comm .....

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as no building in the plot and the assessee had merely sold the land as such. As per the ld. AR undue reliance was placed on the registered sale deed and he could not fathom why the sale deed did not refer to the building. The ld.AR also pointed out that assessee was a member of a HUF which was filing return. Just because the cost of construction was shown in the balance sheet of HUF, as per the ld. AR, claim of the assessee for reducing the cost of construction for computing the capital gains o .....

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w. 7. We have perused the orders and considered the material on record. It is not disputed by the assessee that the sale deed of the plot which resulted in the capital gains did not mention anything regarding any building therein. However, the purchase deed of the plot entered by the assessee with M/s KIADB on 16-12-2009 does mention that there was a lease-cum-sale agreement dated 09-02-1993 between KIADB and the assessee. Relevant part of the sale deed is re-produced hereunder; Deed of sale exe .....

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ppa, Proprietor hereinafter called the Purchaser which term wherever it occurs in these presents shall mean include his/her/is/their heirs, executors, administrators, legal representatives, successors and assigns. Whereas by an lease-cum-sale agreement dated 9th day of February month one thousand nine hundred & ninety three made between the vender of the one part and the purchaser of the other part, the vendor agreed to sell to his, purchaser upon the performance and observance by the purcha .....

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ith the buildings and erections standing and being thereon and together with all rights, easements, privileges, advantages and appurtenances whatsoever pertaining to the said property except and reserving unto the vendor all mines and minerals in and under the said land or any part thereof . No doubt, the cost of the property mentioned in the purchase deed is only ₹ 46,851/-and relevant para is re-produced hereunder; Now this deed of sale witnesseth that in consideration of the sum of S .....

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saba Hobli, Mysore Taluk, Mysore District measuring about 967.00 sq.mtrs. and more particularly described in the schedule hereto, together with trees, hedges, water, water courses, and all the easements, privileges, advantages and appurtenances whatsoever pertaining to the said property and all the estate right title and interest of the vendor in and upon the same or any part thereof to have and to hold the same unto the purchaser absolutely and forever and the purchaser shall and may at all tim .....

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. AO has mentioned that the return of income filed by the assessee for the assessment year 2009-10 had shown an amount of ₹ 45,000/- as the cost of the shed in the balance sheet filed alongwith such return. As against this, the cost considered by the assessee for working out the capital gains was ₹ 7,88,200/-. The AO had sought explanation how the cost increased from 45,000/- to ₹ 7,88,200/- viz. a difference of ₹ 7,43,200/-since the cost of the property as per the purcha .....

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ruction was ₹ 2,55,000/-. As per the assessee this valuation report was obtained by the purchaser for raising a loan. Even if we accept the contention of the assessee that there was indeed a building in the plot, it is a fact that the balance sheet of the assessee did not reflect the cost of the building. On the other hand, it is an admitted position, that the HUF of which the assessee is the Karta had filed its return showing the cost of the shed in its balance sheet. The said HUF was als .....

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computing the capital gains of the assesee. As already mentioned by us, we cannot accept the pleading of the assessee that the building belonged to him, but not to HUF. In the circumstances, we do not find any reason to interfere with the order of the ld.CIT(A) hence, ground no.3 & 3.1 of the assessee stands dismissed. 10. Vide ground no.4 & 4.1 the assessee is aggrieved that the agricultural income to the extent of ₹ 3,89,000/- was not accepted, but was considered under the head .....

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