TMI Blog1998 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act is valid and with jurisdiction ? 2. Whether, on the facts and in the circumstances of the case - (i) is not the order of the Tribunal finding that 'the tenancy arrangement was a genuine one' as against the earlier finding of tenancy 'on a hypothetical basis' one amounting to review and hence against law ? (ii) is not the order against the decision reported in CIT v. Gokul Chand Agarwal [1993] 202 ITR 14 (Cal) and CIT v. Ramesh Electric and Trading Co. [1993] 203 ITR 497 (Bom) ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal which fixed the quantum at Rs. 15 lakhs and 'in fixing this quantum has proceeded on a hypothetical basis that there existed a tenancy between two parties...... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for vacating the apartment. In computing the capital gains on the sale of the apartment, the assessee deducted Rs. 30 lakhs under section 48(1)(a)(i) of the Act claiming that the said expenditure was wholly and exclusively in connection with the transfer. The Assessing Officer, however, allowed deduction only up to Rs. 16 lakhs. The assessee appealed against the disallowance of the balance amount. During the pendency of the appeal, the Commissioner of Income-tax passed an order under section 263 of the Act setting aside the assessment order and directing the Assessing Officer to reconsider the admissibility of the amount deducted by the assessee. The Assessing Officer framed the assessment pursuant to the order passed under section 263 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unreasonable, but that was in the context and setting that the whole transaction is a device or a sham. Therefore, we hold that the reasonableness of the amount paid was not an issue in itself before the Tribunal. Further, in this case, deduction was claimed under section 48(1)(a)(i) of the Income-tax Act under which the expenditure incurred wholly and exclusively in connection with the transfer is to be allowed. There is force in the submission made on behalf of the assessee that the language employed, namely 'expenditure incurred wholly and exclusively does not permit any authority to go into the question whether such expenditure was necessary or reasonable." This is how the Tribunal allowed the miscellaneous application purporting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that the Supreme Court was not required to go into the question of reasonableness of the expenditure under section 10(2)(xv), analogous to section 37(1) and, therefore, Sassoon J. David and Co. P. Ltd.'s case [1979] 118 ITR 261 (SC), cannot be an authority on the proposition : whether the Tribunal could go into the reasonableness of the expenditure under section 10(2)(xv). We are, therefore, of the considered view that no conclusion could have been drawn by the Tribunal on the basis of Sassoon J. David and Co. P. Ltd.'s case [1979] 118 ITR 261 (SC), that there was a mistake apparent from the record. Assuming, but not accepting, that Sassoon J. David and Co. P. Ltd.'s case [1979] 118 ITR 261 (SC), was an authority on the point that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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