TMI Blog2020 (3) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... Disallowance of expenditure incurred on fixing barricades while computing capital gains - HELD THAT:- Both the authorities are making contradictory remarks only based upon their surmises. Learned CIT(A) has further erred in observing as to how barricades can improve the quality of land and cause to improvement of any kind. Here we find that as submitted by the assessee the barricades were necessary to earmark land to be sold. That lands are demarcated by barricades is well known phenomena. In the present situation everybody wants his land to be demarcated by identified barricades. People do not generally sit idle and go by demarcation of land in revenue records. It is naive to assume that people rest upon demarcation of land in land records without making barricades of their own for the various purposes of protection of land, ease in selling it and saving from encroachment etc. Authorities below have totally erred in this regard and impugned expenditure is allowable. Hence, we set aside the orders of the authorities below and decide the issue in favour of the assessee. Addition on sale of Transferable Development Rights (TDR) - AO noted that despite receiving income the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Department : Shri Bharti Singh ORDER PER SHAMIM YAHYA (AM) :- These are cross appeals by the assessee and the Revenue directed against the order of learned CIT(A) dated 13.9.2017 and pertain to A.Y. 2009- 10. 2. Grounds of appeal raised by the Revenue read as under :- 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the disallowance of ₹ 23,00,125/- on account of bad debts without appreciating the fact that the assessee had not produced any details and/or documentary evidences in respect of names and addresses of the debtors to prove the assessment year when these amounts were offered to tax as income so as to consider them written off in the books of accounts. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of ₹ 3,09,68,0287- on sale of Transfer Development Rights (TDR) of ₹ 3,09,68,0287- as long term capital gains by applying the ratio laid down by the Hon'ble Bombay High Court's decision in the case of Sambhaji Nagar Co-op. Hsg. Society Ltd. (No. 1356 of 2012 dated 11.12.2014) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount (in Rs.) Remarks Bad debts w/off 1. Debit balance of debtors written off as irrecoverable 23,00,125 Due to the dispute arising subsequent to sale for the amount charged towards freight, transportation, delay in delivering the goods, rates charged etc. the parties did not pay the outstanding amount. The said amount was outstanding since financial year 1999-200O. Therefore, the said amount was written off as bad and irrecoverable in the financial statements. Total bad debts w/off (A) 23,00,125 Advances w/of 1. Debit balances of sundry creditors 17,38,369 Advances given for materials and services written off as the work was not completed. The said amount is outstanding since financial year 1999-2000. 2. Advances given to retrenched workmen 7,62,39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial on record. We find that the assessee failed to file before the AO (i) the evidence to show that the advances were made in due course of business, (ii) whether the advances were for purchase of any revenue item or capital item, (iii) names and address of the parties and (iv) whether the advances are actually written off in the books of accounts. 7.1. In CIT vs. Calcutta Agency Ltd. (1951) I9 ITR 191 (SC), it was held that the burden of proving the necessary fact in order to entitle the assessee the claim exemption was on the assessee. In Nund and Samont Co. (P) Ltd. vs. CIT (1970) 78 ITR 268 (SC), it is held that it is for the tax payer to establish by evidence that the particular amount is deductible. 8. In view of the above, we set aside the order of the Ld. CIT(A) on the above issue and restore the same to the file of the AO to make an assessment afresh as per the provisions of the Act after giving a reasonable opportunity of being heard to the assessee. The assessee is directed to file the relevant details before the AO. 11. We find that the facts are identical, following the same. We remit this issue to the file of the Assessing Officer with similar directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure of fixing barricades of iron and steel is a prerequisite for the sale effected by the appellant. Therefore, in my opinion, it is not intrinsically linked or wholly and exclusively in connection with the sale. Secondly, by no stretch of imagination, erection of the barricade can be considered as resulting in any improvement in the plot of land. Every plot of land is demarcated in land records of the concerned authorities and there is no improvement if the boundaries are marked with bollards, paint, fence or any other marking. During appellate proceedings, the appellant failed to explain or establish how the said barricade added to the quality of land in question or cause to improvement of any kind. In view of the categorical finding of fact by the Assessing Officer, I do not find any reason to disagree with his conclusions. Accordingly this ground of appeal is dismissed. 15. Against this order the assessee is in appeal before us. 16. We have heard both the counsel and perused the records. Upon careful consideration we find that no issue has been raised by the authorities below on the genuineness of the expenditure. It is also not disputed that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve. 18. Apropos ground relating to deletion of addition of ₹ 3,09,68,028/- on sale of Transferable Development Rights (TDR). On this issue the Assessing Officer observed that the assessee is in receipt of ₹ 3,09,68,028/- on sale of TDR. The Assessing Officer noted that despite receiving income the assessee has not offered the same to tax by making following observation :- During the financial year ended 31 March 2009, the company has sold Transferable Development Rights ('TDR') for a consideration of ₹ 3,09,68,028/-. It is submitted that the said TDRs are related to the land sold by the company during the earlier financial years. The entire cost of the land was considered in computing capital gains in the year in which the land was transferred. Accordingly, there was no cost attributable to the TDRs (related to the land) acquired subsequently as per the Development Rules and sold during the aforesaid financial year. In light of the above facts, the tax position in the return is based on the contention that as the cost cannot be determined, the computation mechanism fails and it is not possible to compute capital gains. Consequently, there will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt term capital gains tax and it is held for more than 3 years then it will attract Long Term Capital Gains Tax. The case is to be interpreted as falling within the definition of Capital Asset and relying on the decision of the of the Bombay High Court in CIT, Bombay City I vs. Tata Services Ltd. Wherein provisions of Section 2(14), (47) 45 were interpreted. It was held U/s. 2(14) of the Income Tax Act a capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. The word property used in S.2(14) of the Act is a word of the ^widest amplitude and the definition of Capital asset. 8.4 In view of the above, the receipt on sale of TDR shall be taxed as Long Term Capital Gain as the underlying land was held for more than three years. As the cost of land has already been claimed by the assessee while computing the capital gain on transfer of such land, the cost of TDR will be taken as Nil, as in the case of bonus shares. Therefore, the contention of the assessee that the computation of capital gain fails u/s.48 as there is nil cost for TDR is not correct. Further, the case laws relied upon by the assessee is different from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon by learned CIT(A) are distinguishable with the instant case. 21. Against this the order the Revenue is in appeal before us. 22. We have heard both the counsel and perused the records. Learned Counsel of the assessee relied upon the order of learned CIT(A). He reiterated that there was no cost to acquire TDR and in this view of the matter no long term capital gain can be attributable to the assessee. Learned Counsel further relied upon the following case laws : Jethala D. Mehta vs. DCIT (2005) 2 SOT 422 Maheshwar Prakash-2 Co-op. Hsg. Society Ltd. Vs. ITO (24 SOT 366) ACIT Vs. Dilip R. Shrinagarpure (ITA No. 6103/Mum/2017 vide order dt. 26.6.2019) Late Shri Lauriano Mendonca Vs. ACIT (ITA No. 3000/Mum/2011 vide order dt. 4.8.2017) CIT Vs. Sambhaji Nagar Co-op. Hsg. Society Ltd. (54 taxmann.com 77) 23. Learned Departmental Representative on the other hand submitted that the case law relied upon by learned Counsel of the assessee are not applicable on the facts of the case. In this regard learned Departmental Representative submitted that the assessee in its following submission before the ITAT itself agrees that there was cost of TDR as under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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