Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Ansh Merchandise Private Limited Versus DCIT – 5 (2) , Mumbai, Addl. CIT – 5 (2) , Mumbai

2016 (11) TMI 599 - ITAT MUMBAI

Short term capital loss - sale of land at Hasteda(Rajasthan) - sham transaction - Held that:- The assessee in its agreement to sale dated 10-03-2008 with Siyaram Exports India Private Limited for purchase of the said land for ₹ 171.50 lacs wherein cash advance of ₹ 10 lacs was only paid by the assessee on 10-03-2008 had an exit clause in the said agreement wherein the assessee could have asked the Siyaram Exports India Private Limited to forfeit advance of ₹ 10 lacs paid by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

prejudice itself by saddling with an avoidable and unwarranted capital loss of ₹ 114 lacs instead of restricting the said capital loss to ₹ 10 lacs as described above by asking the seller Siyaram Exports India Private Limited to forfeit the advance, clearly defies all logic, rationality and principles of commercial expediency known to the business world which clearly indicates to irresistible as well one and only one conclusion that the whole transaction for purchase and sale of afor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xchange hands as ‘on-money’ which were not brought to tax on record . - The transactions for sale and purchase of land were entered into by the assessee and once the Revenue has doubted the transactions as being not genuine for the reasons as set out above, then the onus shifts back to the assessee to prove by cogent evidences and explanations that the transactions for purchase and sale of land were in fact genuine which the assessee in the instant case failed to do so. Thus, these transact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ramachandran ORDER Per Ramit Kochar, Accountant Member These two appeal, filed by the assessee company, being ITA No. 411/Mum/2013 and ITA no. 398/Mum/2013, are directed against two separate appellate orders dated 09th October, 2012 and 11th September 2012 respectively passed by learned Commissioner of Income Tax (Appeals)- 9, Mumbai (hereinafter called the CIT(A) ), for the assessment year s 2008-09 and 2009-10 respectively, the appellate proceedings before the learned CIT(A) arising from the s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he learned Commissioner of Income Tax(Appeal) had erred by upholding the wrong action of learned assessing officer wrongly calculating loss amounting to ₹ 3,83,03,181/- from sale of plywood /furniture instead of profit earned by appellant company amounting to ₹ 9,213/-. 2. The learned Commissioner of Income Tax(Appeal) had again erred by approving the incorrect action of learned assessing officer of disallowing the legitimate rebate and claim amounting to ₹ 18679300/-. 3. The b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing Stock : Rs.1,55,72,930/- Loss: : Rs.3,83,03,181/- It was observed by the AO that in these transactions for purchase/sale of plywood/furniture, the assessee has not taken physical delivery of goods but the delivery was directly given to the assessee s buyer and the transaction was routed through the assessee by which the assessee was receiving purchase bill from the supplier and was subsequently raising sales bill on the buyer. Thus, the assessee was liable only to the extent of commission or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in price which amounts to commission for arranging the transaction. Thus, the AO held that the loss shown by the assessee is not a real loss attributable to the assessee and the same was disallowed by the AO vide assessment order dated 22-12-2010 passed by the AO u/s. 143(3) of the Act. Secondly, It was noted by the AO from the Profit and Loss Account that the assessee has claimed rebate of ₹ 1,86,79,300/-. The assessee was asked to explain the same and justify the allowability of claim. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he goods were not properly stored in godowns and were soaked on water and got moisture in many lots. 2. GSM varieties were found in some lots of paper. 3. Shining/brightness got reduced after moisture of paper and became lower and inferior quality material. 4. There was some defective lot of paper and boards. Thus, it was observed that the product was not in a position to be sold in the open market as fresh and hence the assessee had to allow credit of ₹ 1,86,79,300/- to M/s. Premium Paper .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inferior quality of material supplied by the assessee to the said party. The AO observed that the assessee has not taken deliveries of these goods and in case if the assessee s supplier has supplied defective material, the assessee should raise debit notes in their favour since real transaction of purchase and sale of goods is between the assessee s suppliers and the purchaser M/s Premium Paper and Board Industries Limited and the assessee is only acting as conduit and thus not responsible for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee submitted before the learned CIT(A) that the assessee is engaged in the business of trading in various goods and commodities as also in investing as well as trading in shares. It was submitted that the auditors of the assessee company inadvertently overlapped some of the traded items in the audited Balance Sheet s grouping and schedule . The assessee submitted that the actual profit was ₹ 9,213/- from traded items of plywood and furniture instead of loss of ₹ 3,83,03,181/- mistake .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his incorrect and unjustified huge additions. It was submitted by the assessee that the AO never made any enquiries with the suppliers of the assessee u/s. 131/133(6) of the Act. With respect to the second issue with respect to non allowability of rebate and claim of ₹ 1,86,79,300/- , it was submitted by the assessee before learned CIT(A) that the assessee supplied the goods i.e. paper and boards to its customers in various lots. The goods were found by the customers to be not in good cond .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stified additions. The submissions made by the assessee were ignored and overlooked mistakenly by the AO while sending remand report to the learned CIT(A), was the submission of the assessee before learned CIT(A). It was submitted that the assessee dealt within several products such as plywood, furniture , cement, glasses, paper etc and the auditor of the assessee overlapped certain traded items in the audited Balance Sheet s grouping/schedules. It was submitted that the loss determined by the A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed in the books of accounts which no body can alter the same and the same can be verified. The learned AO in remand report submitted to learned CIT(A) reiterated its findings as were in the assessment order and also observed that the assessee is now taking the plea of overlapping/regrouping done by the auditors which was incorrect in original audit report. The rectified page of audit report submitted now by the assessee vitiates the authenticity of original audit report and hence the AO stated i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the inaccuracies in the audit report and in audited balance sheet and profit and loss account. The learned CIT(A) rejected the contentions of the assessee by holding that the assessee is now contending that there is an mistake in audit report and audited financial statements. The learned CIT(A) observed that the auditors have not revised the audited financial statements and the audit report , nor the auditors have issued any clarification with regard to any errors in the audited final account .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pellate order dated 09-10-2012 passed by learned CIT(A). With respect to second disallowance of claim of ₹ 1,86,79,300/- towards defective material, it was observed by learned CIT(A) that the assessee has not brought on record any material or evidence to prove that the assessee was responsible for any defect in the material supplied by the supplier to the end users. No copy of commission agreement nor the terms and conditions of purchase made by the assessee and sales made by the assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was a mistake which occurred by the auditors in grouping/schedule with respect to reflecting purchase of plywood/furniture where in correct figure of purchase is ₹ 5,20,96,701/- instead of ₹ 9,09,78,075/- which is reflected in audited financial statements which was pointed out to the authorities below and hence instead of loss of ₹ 3,83,03,181/- as claimed in return of income filed with the Revenue on trading of plywood/furniture, the assessee earned profit of ₹ 9,213/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ok wherein attention was drawn of the authorities below to the error which crept in the figures of purchase due to inadvertent mistake of the auditors. The learned counsel for the assessee drew our attention to the statement of fact filed before learned CIT(A) which is placed in the file to reiterate its submissions. It was submitted that great prejudice has been caused to the assessee due to error committed by the auditors and the authorities below have not considered the submissions of the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he issue and the authorities below rejected the contentions of the assessee without any verifications, enquiry and examination. The ld DR relied on the orders of the authorities below. 8. We have considered the rival consideration and perused the material on record. We have observed that it is stated by the assessee that due to error/mistake committed by the auditors , the figures of purchase was misreported in the schedules/ groupings which led to the claim of loss of ₹ 3,83,03,181/- as a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nquiry, examination and verification as may be considered appropriate by the AO. The AO shall examine the matter comprehensively including implication of contention of the assessee that the purchase were shown at higher figure of ₹ 9,09,78,075/- due to inadvertent mistake instead of actual purchases being of ₹ 5,20,96,701/- , and its implication thereof on the taxability of the differential amount as now the expenditure stood reduced by the amount of ₹ 3,88,81,374/- due to with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e with law. We order accordingly. With respect to second issue of disallowance of claim of rebate of ₹ 1,86,79,300/- by the authorities below on account of defective material supplied by the assessee to its customer, we after considering the rival contentions and perusing the material on record are again of considered view keeping in view facts and circumstances of the case, that this matter also need to be set aside and restored to the file of the AO for de-novo determination of the issue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m of rebate for defective material , which shall be admitted by the AO and adjudicated on merits in accordance with law. Needless to say proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law. We order accordingly. 9. In the result, appeal filed by the assessee in ITA No. 411/Mum/2012 is allowed for statistical purposes. 10. Now, we shall take appeal for assessment year 2009-10 vide ITA no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ged in the business of Trading in Commodities and investment in Equity Shares . 2. The learned Commissioner of Income Tax(Appeal) has again erred by approving the unfair and unreasonable stand taken by learned assessing of considering genuine Short Term Capital Loss on sale of Land at Hasteda (Rajasthan) amounting to ₹ 11427420/- as sham transaction. 11. On verification of audited accounts and the computation of income statement filed along with the return of income by the assessee, it was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the expenses were incurred out of common pool funds as well as the assessee has maintained composite books of accounts for taxable as well exempt income. The assessee paid interest of ₹ 5,03,805/- and the assessee was asked to give computation of disallowance u/s 14A of the Act read with Rule 8D of Income Tax Rules, 1962. The assesssee submitted the details which worked out to disallowance of Rs. Nil u/r 8D(2)(i), ₹ 66,358/- u/r 8D(2)(ii) and ₹ 5,86,369/- u/r 8D(2)(iii) of Inco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of earning dividend income which is an exempt income. The assessee submitted that in few case it got the dividend which does not mean that the dividend earning was the motive of the assessee. The assessee submitted that no proximity is established between the expenditure incurred and the income not forming part of the total income. The assessee relied upon the decision of Hon ble Bombay High Court in the case of Godrej and Boyce Manufacturing Company Limited v. DCIT (2010) 328 ITR 81(Bom.) and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the exempted income which was not included in the total taxable income. The assessee s present case is covered by provisions of Section 14A(3) of the Act because the assessee has claimed that the no expenditure was incurred by the assessee in relation to the exempted income which did not form part of the total income. It was also observed by learned CIT(A) that the assessee case is also covered by Section 14A(2) of the Act as the AO was not satisfied with the correctness of the claim of the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s held as stock in trade shall also be considered for purposes of disallowance. Thus, the learned CIT(A) confirmed the disallowance of ₹ 6,52,727/- made by the AO u/s 14A of the Act read with Rule 8D of Income Tax Rules, 1962, vide appellate order dated 11.09.2012 passed by learned CIT(A). 14. Aggrieved by the appellate order dated 11.09.2012 passed by learned CIT(A), the assessee filed second appeal with the Tribunal. 15. Before the Tribunal, the learned counsel for the assessee contended .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

no 8581/Mum/2011 as well on decision of Pr. CIT v. Empire Packaging Private Limited and decision of Hon ble Delhi High Court in the case of Joint Investment Private Limited v. CIT (2015) 372 ITR 694(Del HC) to contend that the disallowance u/s. 14A of the Act cannot exceed the dividend income earned by the assessee. The ld DR relied upon the orders of learned CIT(A). 16. We have heard the rival contentions and perused the material on record including case laws relied upon, we have observed that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) of the Act having regards to the accounts of the assessee. The assessee has claimed that no expenditure is incurred in relation to earning of income which does not form part of the total income of the assessee as per provisions of the Act. The authorities below have given a finding of fact that the assessee has maintained composite books of accounts and it is not possible to work out the expenditure incurred in relation to earning of exempt income. The assessee also did not came forward to pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

age investment held by the assessee, the shares/securities held as stock in trade cannot be included for computing disallowance u/s 14A of the Act read with Rule 8D of Income Tax Rules, 1962 for which reference is drawn to recent decision of Mumbai Tribunal in the case of Fiduciary Shares and Stock Private Limited v. ACIT in (2016) 70 taxmann.com 23(Mum. Trib.) wherein the Tribunal held as under: 4.4.1 We have heard the rival contentions of both the parties and perused and carefully considered t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e made under section 14A r.w. Rule 8D should only be made with regard to investments and not with regard to shares held as stock-in-trade. This decision of the Hon'ble Bombay High Court (supra) has been followed by the Coordinate Bench of this Tribunal in the case of Devkant Synthetics (India) (P.) Ltd. (supra) wherein at para 12 and 13 thereof it has been held as under:- "12. We heard the parties and perused the record. We notice that the Hon'ble Karnataka High Court has held in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ration. The Ld CIT(A) had observed that, one can at best disallow the expenses which are incurred for earning dividend income and for that purpose, the figures under the head "Investment" could be taken and some charges apportioned for the purpose of computing expenses. The decision rendered by the Tribunal in the case of India Advantage Securities Ltd. (supra) was found to be neither perverse nor vitiated by any error of law apparent on the face of record by Hon'ble Bombay High Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

decision of Hon'ble Karnataka High Court in the case of CCI Ltd. (supra), the Tribunal held that the disallowance of interest in relation to dividend received from shares held as stock-in-trade cannot be made.' 4.4.2 Respectfully following the decisions of the Hon'ble Bombay High Court in the case of India Advantage Securities Ltd. (supra), the Hon'ble Karnataka High Court in the case of CCI Ltd. (Supra) and the Coordinate Bench of this Tribunal in the case of Devkant Synthetics .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oods and Inns Limited v. ACIT (2016) 159 ITD 1007(Mum. Trib.) , wherein the Tribunal held as under: 3.3.1 For assessment years 2009-10 and 2010-11 The assessee had earned exempt dividend income of ₹ 41,126/- and ₹ 40,003/- respectively, but suo moto disallowed an amount of ₹ 40,000/-as expenditure incurred for earning exempt income only in A.Y. 2010-11. The AO invoking the provisions of section 14A r.w. Rule 8D disallowed ₹ 18,86,195/- for A.Y. 2009-10 and ₹ 17,38,2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the learned CIT (A) in restricting the disallowance to ½% of the average investment for administrative expenses. On the other hand, the assessee in its COs for assessment years 2009-10 and 2010-11 has challenged the impugned orders of the learned CIT (A) in directing the AO to compute the disallowance under section 14A r.w. Rule 8D @0.5% of the total average investment for administrative expenses without assigning any reasons, when such disallowance ought to be made only in respect of 0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

incurred for earning the exempt income in A.Y. 2010-11 It was contended that in the light of the decisions of the Hon'ble Punjab & Haryana High Court in the case of PR. CIT v. Empire Package (P.) Ltd. [IT Appeal No. 415 of 2015, dated 12-1-2016] and of the Hon'ble Punj. & Har. High Court in the case of CIT v. Deepak Mittal [2014] 361 ITR 131/[2013] 38 taxmann.com 83/219 Taxman 314 (Punj. & Har.), the disallowance under section 14A r.w. Rule 9D in the case on hand @ 0.5% of in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eing there in the relevant section or rule?" The Hon'ble High Court dismissed Revenue's appeal holding as under at paras 3 to 5: - '3. We have heard learned counsel for the appellant-revenue. 4. The Tribunal has only remanded the matter to the Assessing Officer after considering the factual position and the relevant case law on the point. It relied upon the decision rendered by this Court in CIT v. Deepak Mittal, [2013] 38 taxmann.com 83 (Punj. & Har.) holding that disallowa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

expenditure if any incurred by the assessee in relation to earning of exempt income. The income from dividend had been shown at ₹ 1,11,564/- whereas disallowance under Section 14A read with Rule 8D of the Rules worked out by the Assessing Officer came to ₹ 4,09,675/-. Thus, the Assessing Officer disallowed the entire tax exempt income which is not permissible as per settled position of law. Consequently, the Tribunal remitted the matter to the Assessing Officer with a direction to de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the judgment of the Hon'ble Delhi High Court referred to above. The Hon'ble Delhi High Court held that the window for disallowance is indicated in section 14A, and is only to the extent of disallowing expenditure "incurred by the assessee in relation to the tax exempt income". The disallowance under section 14A read with Rule 8D as worked out by the Assessing officer is not in accordance with law and as such working is not sustainable. 8. In view of the above observations, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence by this Court. Learned counsel for the appellant-revenue has not been able to show any illegality or perversity in the impugned order. Thus, no substantial question of law arises. Consequently, the appeal stands dismissed.' 3.3.5 Respectfully following the decision of the Hon'ble Punjab & Haryana High Court in Empire Package (P.) Ltd. (supra) and of the Hon'ble Punj. & Har. High Court in the case of Deepak Mittal (supra), we are of the considered view that the learned CI .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ter affording reasonable opportunity to the assessee of being heard and to file submissions/details required in this regard. Consequently, assessee's ground No. (a) in CO for 2009-10 and CO for A.Y. 2010- 11 and Revenue's ground No. 1 for A.Y. 2010-11 are treated as allowed for statistical purposes. We have perused the other case laws relied upon by the assessee. In the instant case, there is a finding recorded by the authorities below that the assessee is maintaining composite books bot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340(Bom HC) and in the case of HDFC Bank Ltd. v. DCIT (2014) 366 ITR 505(Bom HC) and decision of Hon'ble Bombay High Court in writ petition in HDFC Bank Limited v. DCIT(2016) 67 taxmann.com 42(Bom. HC) . We order accordingly. 17. Next Issue in this appeal is with respect to treatment by Revenue of short term capital loss incurred by the assessee on sale of land at Hasteda(Rajasthan) amounting to ₹ 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in connection therewith observed that agreement to sale dated 10-03-2008 was entered into by the assessee with Siyaram Exports India Private Limited and the assessee wherein it is mentioned that the assignor i.e. Siyaram Exports India Private Limited shall transfer and assign to the assignee i.e. the assessee(or its nominees) 7.33 hectare of land with their appurtenances free from encumbrances for a price of ₹ 1,71,50,000/- . The assignee ( i.e. the assessee ) had paid ₹ 10,00,000/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by Mr. Rajendra Kumar Soni resident of Jaipur as power of attorney holder of the assessee company on 22-01-2009.The payments for the land purchase by the assessee were made when the land were sold after nearly ten months and resulted in loss of ₹ 1,14,27,420/- . The assessee was asked to explain that why the said loss on sale of Hasteda land should not be disallowed. The assessee submitted before the AO that the assessee bought the said land admeasuring 7.33 hectares in March 2008 at Haste .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see took decision to buy this parcel of land.Since the plan could not go through and hence the assessee sold this land to Smt. Anju Yadav and to Smt. Savitri Yadav and Smt. Nirmala Yadav. The sale deed was registered on 16-01-2009. It was submitted that transaction is genuine and merely because payment to Siyaram Exports Private Limited was made late , it could not be held to be bogus transaction. The assessee has paid full consideration to the seller party and the assessee has also got full pay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sources which has no credence. The transaction defies logic and the balance sheet does not show any stress sign and at best the assessee could have lost advance payment of ₹ 10 lacs if the assessee was not able to carry forward the sale transaction and complete the sale by 31-12-2008 as there was no need for sale and to incur loss of ₹ 1.14 crores and instead loss could have been only ₹ 10 lacs. Thus, the AO held based on the series of events mentioned above and also conduct of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

before the AO which are not repeated. The learned CIT(A) directed the assessee to file proof in the form of extracts from revenue records in the prescribed 7/12 registers. It was observed by learned CIT(A) that it is an undisputed position that impugned land at Village Hasteda is wholly and fully agricultural land. The land was registered in name of Siyaram Exports Private Limited . The assessee did not submit extracts from 7/12 registers. Thus, learned CIT(A) held that the assessee had failed t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 161.50 lacs were made after the land was transferred to the buyers namely Smt Anju Yadav, Smt Savitri Yadav and Smt. Nirmala Yadav. Thus, as per learned CIT(A) the genuineness of the transaction leading to alleged capital loss of ₹ 1,14,27,420/- is not proved . Accordingly the appeal of the assessee was dismissed by learned CIT(A) vide appellate orders dated 11.09.2012. 20. Aggrieved by the appellate orders dated 11.09.2012 passed by learned CIT(A), the assessee filed second appeal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gains expecting huge increase in valuation of land within short period of time on account of development of township. The assessee paid ₹ 10 lacs in cash at time of purchase agreement while rest of the consideration of ₹ 161.50 lacs was paid in the month of January 2009 starting from 17th January 2009. The said agreement is placed in paper book / page 26-28 filed with Tribunal. It was submitted that the land prices did not appreciate and the assessee had to fulfill obligation to pay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds are placed in paper book/page 29-58.The assessee incurred loss of ₹ 1,14,27,420/- in the said purchase and sale of land. It was submitted that all the facts were brought to the knowledge of the authorities below but they erred in holding that the said transaction is not genuine and is a sham transaction. It was submitted that by entering agreement to sale dated 10-03-2008 wherein the assessee paid ₹ 10 lacs as initial consideration to Siyaram Exports India Private Limited, the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

timate sale deed s dated 16-01-2009 had both Siyaram Exports India Private Limited and the assessee as a party to the sale deed so that there are no defects in the title. It was submitted that both the parties are not related to the assessee. The sale is by registered sale deed and the AO did not conduct any enquiry. It was submitted that as per agreement to sale dated 10-03-2008, the assessee had to pay entire balance consideration together, the assessee paid the same in January 2009 and part o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Act and similarly the capital losses arising on sale of agricultural land are not allowable to be set off against other capital gains earned by the assessee. 23. We have heard the rival contentions and perused the material on record. We have observed that the assessee had purchased the agricultural land bearing Khasra no 1779, 1780 , 1779/2120, 1780/2121 , 1781 , 1785/2131 , 1782 and 1817 in aggregate 7.33 hectare ( 8 Rakba) situated at Village Hasteda , Patwar area Hasteda , Land record ins .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t if the assessee failed to pay balance consideration of ₹ 161.50 lacs on or before 31-12-2008, the said amount of ₹ 10 lacs paid as an advance will be forfeited by the sellers M/s Siyaram Exports India Private Limited. The assessee had stated that the land was purchased on 10-03-2008 with an objective of selling it within a short period of time and making capital gains as it was expected that there will be huge increase in valuation of land as there was some reliable information tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and Smt. Nirmala Yadav for total consideration of ₹ 58.40 lacs. The assessee , thereafter, made balance payment of ₹ 161.50 lacs in the month of January 2009 starting from 17th January 2009 to Siyaram Exports India Private Limited for completing purchase of afore-stated land which was purchased vide agreement to sale dated 10-03-2008, while two sale deeds executed by the assessee in favour of Smt Anju Yadav and secondly to Smt Savitri Yadav and Smt. Nirmala Yadav are dated 16-01-200 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the month of January 2009 , i.e. just in 10 months. Both the sales deeds dated 16-01-2009 for total consideration of ₹ 58.40 lacs with Smt Anju Yadav and secondly with Smt Savitri Yadav and Smt. Nirmala Yadav are placed in paper book/page 29-58. The assessee in its agreement to sale dated 10-03-2008 with Siyaram Exports India Private Limited for purchase of the said land for ₹ 171.50 lacs wherein cash advance of ₹ 10 lacs was only paid by the assessee on 10-03-2008 had an exit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

6-01-2009 for sale of aforesaid land to Smt Anju Yadav and secondly to Smt Savitri Yadav and Smt. Nirmala Yadav for a meager sum of ₹ 58.40 lacs to self prejudice itself by saddling with an avoidable and unwarranted capital loss of ₹ 114 lacs instead of restricting the said capital loss to ₹ 10 lacs as described above by asking the seller Siyaram Exports India Private Limited to forfeit the advance, clearly defies all logic, rationality and principles of commercial expediency k .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version