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2017 (6) TMI 247 - ITAT CHENNAI

2017 (6) TMI 247 - ITAT CHENNAI - TMI - Revision u/s 263 - Claim of loss on account of forfeited amount - Held that:- AO has accepted the claim of assessee in respect of loss on account of forfeited amount of ₹ 5 lakhs, only on the basis of submissions of assessee without conducting further enquiry with regard to the genuineness and nature of the loss. Perusing the submissions of assessee, it does not prove the nature of loss as revenue expenditure. Being so, it is to be examined by the AO .....

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wrong section - Held that:- Our opinion on allowability of deduction u/s.54F of the Act is an alternative claim of assessee and not a fresh claim so as to file the revised return. The assessee has already filed the revised return and has made a claim in its return under wrong section. At the time of assessment, the assessee clarified that claim of deduction u/s.54 of the Act is wrong and it should be claimed u/s.54F as the assessee has used the capital gains of sale of property for purchase of .....

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T MEMBER, AND Shri Duvvuru RL Reddy, JUDICIAL MEMBER For The Appellant : Mr.N.V.Balaji,Advocate For The Respondent : Mr.Anjaneyalu, CIT D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal of the assessee is directed against the order of the Administrative Commissioner-8, Chennai, dated 27.2.2015 and pertains to assessment year 2010-11. 2. The assessee raised the following grounds for our adjudication. 1) The orders of the learned CIT is against the law, the facts and circumstances of th .....

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ejudicial to the interest of the revenue and therefore he did not jurisdiction to revise the assessment under section 263 of the Act. 4) The learned CIT erred in holding that no application, no enquiry whatsoever was carried out by the assessing officer. The CIT failed to note that both the issues were considered by the assessing officer by seeking details and clarification from the assessee in the course of assessment proceedings. 5) The learned CIT erred in substituting his opinion on allowanc .....

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n view thereof the same is revenue in nature. Further the said submission of the assessee was examined and accepted by the assessing officer in the course of assessment under section 143 (3) of the Act. 8) The learned CIT erred in holding that the assessee s claim under section 54 is not in order. The CIT failed to note that during the assessment proceedings the assessee brought to the attention of the assessing officer Section 54F of the Act being the correct provision under which the claim is .....

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etary concern under the name and style M/s Aim Transport, and filed his returned an income of ₹ 21,70,955/- for the assessment year 2010-11 after claiming deduction u/s.54 of the Act. The assessing officer completed the assessment under section 143(3) of the Act vide his order dated 01.03.2013, determining the total income at ₹ 26,60,160/-. In completing the assessment, amongst other claims, the assessing officer had allowed the claim of the assessee for the deduction of forfeited am .....

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t is capital in nature and claimed as revenue expenditure by the assessee and (ii) the claim made by the assessee was under section 54 of the Act and deduction for the same is allowable only on sale of house property and deduction for the same is allowable only sale of house property, but the assessee had sold land, to which section 54 of the Act does not apply. Besides it, there was no revised return of income filed by the assessee. Therefore, the ld. CIT vide his order dated 27.02.2015 u/s.263 .....

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, which is on account of forfeited advance paid to the Volvo bus and also there is an enquiry by the AO with regard to capital gains. The assessee furnished the details to the AO vide its letter dated 18.12.2012 and also vide letter dated 26.12.2012. The assessee in his letter stated that the assessee had booked a Volvo with a specific design with Volvo India Private Ltd., on 21.12.2008 by paying ₹ 5 lakhs as token advance by cheque No.036524 dated 18.11.2008. The Volvo India manufactured .....

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year on a condition that this amount will be forfeited as it will be a loss on sale to other buyer. The assessee was having no alternate rather than accepting the term of M/s.Volvo India Pvt Ltd. Being a loss to assessee, the amount was debited to Volvo expenditure Account. The AO after satisfying about the claim of assessee, allowed the claim of assessee. 5. Regarding the claim for deduction u/s.54 of the Act, the deduction u/s.54 of the Act claimed by the assessee was enquired by the ld. Asses .....

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as originally claimed. 5.1 Now, on this issue ld.CIT wants further enquiry from the end of the ld. Assessing Officer. In our opinion, the AO has accepted the claim of assessee in respect of loss on account of forfeited amount of ₹ 5 lakhs, only on the basis of submissions of assessee without conducting further enquiry with regard to the genuineness and nature of the loss. The AO had not gathered any information regarding the nature of loss whether capital or revenue and the evidence brough .....

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