TMI Blog2016 (6) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... ount the payment of which is absolutely necessary to effect the transfer will be an expenditure covered by this clause. In other words, if, without removing any encumbrance, sale or transfer could not be effected, the amount paid for removing that encumbrance will fall under clause (i). In this case, sale of transfer could not be effected and the amount paid for removing that encumbrance will fall under clause (i) of sec.48 of the Act. We are of the opinion that the above two payments to be allowed. It is needless to say that had the assessee not paid to the workmen, who had taken the possession of factory premises of the assessee could not be allowed to transfer the said capital asset. However, if the assessee had claimed any amount out of this, in any assessment year , same to be reduced from this amount by AO while giving effect to this order. Accordingly, the grounds relating to these issues are allowed. Disallowance of commission payment - contention of the ld. DR is that these payments are not properly vouched and doubted the services rendered by the recipient - HELD THAT:- CIT(Appeals) has given a finding that the assessee has not produced brokers to show that they h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of sec.43B of the Act. Hence, we remit this issue to the file of the AO for fresh consideration. Business income in the form of interest receipts - business loss arising out of the business activities should be set off against the capital gain on sale of business assets - HELD THAT:- The assessee deposited certain fund out of the amount received from sale of land and interest earned from that deposit as income from other sources and in view of the judgment in the case of Tuticorin Alkali Chemicals And Fertilizers Ltd. v. CIT [ 1997 (7) TMI 4 - SUPREME COURT] wherein it was held that interest earned by the assessee on short term deposit in bank out of term loan is income under the head other sources . Hence, this issue is dismissed. Disallowance of the claim of expenditure towards payment of commission at 100% and site clearing charges at 75% while calculating long term capital gains - HELD THAT:- The assessee had to engage personnel specially skilled in doing such kind of jobs who were illiterate and working in an unorganized manner. These personnel did not normally come and work regularly but were coming and working erratically. Besides they had to be paid in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to by the Labour union of the Assessee Company, way back in 1993, which later resulted in a lockout declared by the Management. The Management could not continue to carry on the business, primarily owing to the continued strike by the labour union. Owing to the above the Company had gone sick and the Company was constrained to approach BIFR, for remedial measures. However, BIFR had passed an ex-parte order, ordering winding up of the Assessee Company and had accordingly sought to appoint an official receiver. 3.1 The Company challenged the order of the BIFR, by a writ petition before the Madras High Court, being WP No 19907 of 2001. In the meantime owing to the sickness, the Assessee company could not meet expectations of its employees in terms of increment, bonus and other labour measures. The employees post-strike and lockout, erected barbed wire fence around the premises, housing, factory and corporate office thereby virtually preventing all from ingress and egress. In the meantime the secured creditor Bank of Baroda, which had earlier advanced loan against the security of all the assets, including Stock-in-Trade, had moved petition before DRT (Debts Recovery Tribunal) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove only to ensure that it continues to carry on the business after avoiding winding up, after such business was helplessly remained under lull. 3.4 In the course of the assessment proceeding the Assessee, claimed deduction u/s 48(i) for the following payments made: a) Payments made to workmen, of ₹ 8,07,43,083/- who had physically retained the possession (though the bank had taken token legal possession of the property) of the property by preventing the management from entering the property, by putting barricades etc; b) Payment made to secured creditor Bank of Baroda, to the tune of ₹ 18.00 Crores/- to secure legal release of the property prior to sale of the property and also in compliance with the implementation of the MOC. c) Payment made to the sales tax department to the tune of ₹ 97,49,342/- to secure/raise the attachment made by the sales tax department. d) Payment of commission of ₹ 1,98,17,992/- e) Business expenditure of ₹ 3,68,30,254/- f) Bad debts of ₹ 14,21,618/-. 3.5 It is submitted that the above payments, i.e. payments made to workmen, secured creditor, sales tax department, commission payment to mediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en possession of the factory premises of the assessee company by erecting barbed wire fence and virtually preventing ingress and egress from the property. This finding of fact was recorded by the Learned Assessing Officer in his Assessment Order. Thus the forced possession by the workmen had become an encumbrance which was not created by the assessee company by itself but thrust upon it. The management thought it wise, on the grounds of prudence and commercial expediency, not to take back those employees who brought about the strike in the year 1993 and continued till 2007. It is a statutory liability imposed on the employer to redeem by making payment. Thus the employer, the Assessee Company was constrained to make the payment to secure free possession of the property, which is a pre-condition for the transfer, in this context, the payment becomes a necessary to secure free possession of the property and thus qualifies for deduction u/s 48 (1). 4.1 It is submitted that the workmen were demanding their compensation. The workmen were made party to the proceedings. It is submitted that the workmen have claimed/right over the immoveable property of the company and the said right is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of a secured creditor of a company is ₹ 1,00,000. The total amount of the workmen s dues is ₹ 1,00,000. The amount of the debts due from the company to its secured creditors is ₹ 3,00,000. The aggregate of the amount of workmen s dues and of the amount of debts due to secured creditors is ₹ 4,00,000. The workmen s portion of the security is, therefore, one-fourth of the value of the security, that is ₹ 25,000. e. Section 529A is crucial for consideration of these appeals and it is reproduced as it is: Section 529A Overriding preferential payment. (1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company- (a) workmen s dues; and (b) debts due to secured creditors to the extent such debts rank under Clause (c) of the proviso to Subsection (1) of Section 529 pari passu with such dues, shall be paid in priority to all other debts. (2) The debts payable under Clause (a) and Clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate proportions. f. From the above it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Clause (c) of the proviso to Sub-section (1) of Section 529 of the Companies Act shall be paid in priority over all other dues of the company. Section 529A was inserted by Companies (Amendment) Act, 1985. By incorporation of this provision, workmen s dues rank pari passu with secured creditors. In other words, the workmen of the company in winding up acquire the status of secured creditors. Pertinently, while inserting Section 529A in the Companies Act by the Companies (Amendment) Act, 1985, the proviso to Sub-section (1) of Section 529 was also inserted which provides that the security of every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen s portion. 4.4 He also relied on the judgment in the case of Bank of Maharashtra V/s Pandurang Keshav Gorwardkar and others reported in (2013) 7 SSC 754, wherein it has been held as follows: 63. A cumulative reading of Sections 529A and 529(1)(c) proviso ends to an irresistible conclusion that where a company is in liquidation, a statutory charge is created in favour of workmen in respect of their dues over the security of every secured creditor and this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment made. Thus the payment made to secure the release of the property and further to comply with the compromise reached qualifies for deduction u/s. 48(1). He also relied on the judgment of the Madras High Court in the case of CIT vs A. Venkataraman (1982) 137 ITR 846, wherein it was held that retrenchment compensation paid to the employees in terms of the agreement to sell was an allowable deduction incurred wholly and exclusively in connection with the sale of the asset. The case of Bawa Cherian Vs ITO (Cochin) was also considered among similar lines. He further relied on the judgment of the Punjab Haryana High Court in the case of Ambala Cantt Electric supply corporation Vs CIT 133 ITR 343. 5. Regarding settlement to the Secured Creditor to Bank, it was submitted that the settlement made to the secured creditor was essential and without which the property would not have been sold at all. It is also submitted that the said property was mortgaged to the Bank as a security for the loans taken. It is also submitted fact that SARFAESI proceedings were initiated by the Bank. It is settled proposition of law once SARFAESI proceedings are initiated then the same operates a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or payment of surplus to the person entitled thereto. Section 13(8) inter alia states that if the dues of the secured creditor together with all costs, charges and expenses incurred are tendered to the secured creditor before the date fixed for sale/ transfer the secured asset shall not be sold or transferred by the Bank/FI to the asset reconstruction company and no further steps shall be taken in that regard. Section 13(9) inter alia states that where a financial asset is funded by more than one bank/FI or in case of joint financing by a consortium, no single secured creditor from that consortium shall be entitled to exercise right under Section 13(4) unless exercise of such right is agreed upon by all the secured creditors. Section 13(9) provides for one more instance when permission of DRT may be required under the First proviso to Section 19(1) of the DRT Act. The agreement between the secured creditors in such cases is required to be placed before the DRT not as a fetter on the rights of the secured creditors but out of abundant caution. Generally, such agreements are complex, in measure, particularly because rights of each of the secured creditor in the consortium may be requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Section 13(3) states that, no borrower shall, after receipt of notice under Section 13(2), transfer by way of sale, lease or otherwise any of secured assets referred to in the notice, without prior written consent of the secured creditor. Thus, Section 13(13) further fortifies our view that notice under Section 13(2) is not merely a show cause notice. In fact, Section 13(13) indicates that the notice under Section 13(2) in effect operates as an attachment/injunction restraining the borrower from disposing of the secured assets and, therefore, such a notice, which in the present case is dated 6-1-12003 is not a mere show cause notice but it is an action taken under the provision of the NPA Act. 5.3 The ld. AR, relied on another judgment reported in Sree Lakshmi Products rep. by its Partner Vs. State Bank of India 2007(2) CTC 193 and according to him, from the above judgment, it is clear that the bank/FI is entitled to take actual possession of the secured assets from the borrower or from any other person in terms and Section 13(4) of the SARFAESI Act. Any transfer of secured assets after taking possession of the same by the Bank/FI shall vest in the transferee all rights in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impossible. 5.5 In this regard, he made reference to the following judgments: 1. Gopeenath Paul Sons and another vs. DCIT 278 ITR 240(Cal) 2. CIT vs. Shakuntala Kantilal 190 ITR 56 (Cal) 3 CIT vs. Bradford Trading Company Pvt. Ltd. 261 ITR 222 (Mad) 4. CIT vs. Abrar Alvi 247 ITR 312 (Bom.) 6. Regarding payment made to the sales tax department to the tune of ₹ 97,49,342/- to secure/raise the attachment made by the sales tax department, it is submitted that there was a further charge over the property by the Sales tax department. Since there was an outstanding due towards sales tax, the department, had initiated action and had created charge over the property of the company. The sales tax department made it very clear by their letter dated 10.4.2008, that only on depositing the necessary monies, the charge and the attachment on the land will be lifted. Thereafter the assesse entered into negotiations and availed the SAMADHAN SCHEME and settled the entire dues of the sales tax department by depositing a sum of ₹ 97,49,342/- and only after the entire attachment and charges over the land were removed on 25.2.2009, thus facilitating this assesse to proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services of the recipients, except predominant prevalence of presumption of bad faith about the assessee and conjectures that no services would have been rendered by those brokers, to reject the all the good evidences produced by the assessee and the confirmations thereon made by the respective recipients. Further the AO and the CIT(A) had not rejected the payments of commission on the grounds that the same was excessive. 7.2 It was submitted that the commission totally worked out to less than 5% of the total sale consideration which is reasonable considering he difficulties surrounding the sale of a property which had a chequered history. 7.3 It is submitted that both the Assessing Officer and the Learned Commissioner of Income Tax, had not doubted the veracity (genuineness) of the payments made. The only ground attributed to was that evidences that were let in were inadequate, forgetting the fact that the higher (if not the highest) sale consideration received amidst the adverse circumstances (of adverse conditions in which the assessee found itself in), and that, too within an incredibly shorter time constitute a kind of unimpeachable evidence which cannot be arbitrarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was yet another primary factor that also forced the management of the assessee to dispose of the old and obsolete machineries. Just because certain properties were either sold or planned to be sold, it cannot be a ground to draw an inference that the Company is in the process of winding up. Winding up is a process of law and it cannot be assumed, unless the same has happened. 8.1 The Companies Act provides for sale of its entire undertaking or part of its undertaking, through Sec.293 of Companies Act and yet remain in the thick of its business and its existence is not disturbed. The Companies Act does not provide for compulsory winding up, even in the wake of disposal of its undertaking. The Companies Act does not even assume that in the wake of such sale of its undertaking, the primary business of the Company would come to an end or ceased to be carried on. Thus even disposal of its undertaking cannot lead to an inference of winding up. 8.2 He submitted that the Income Tax Act, too, provides for an occasion, through Sec.54G, wherein the assessee may dispose of its entire undertaking and even remain without any assets and yet continue to remain as a business entity, to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring activity during the year. It is to be seen that the Learned Commissioner of Income Tax (Appeals), did not even allude to the same ground to confirm the disallowance made by the Assessing Officer, instead Learned Commissioner of Income tax(Appeals) has stated as his grounds of confirmation of disallowance that the assessee could not furnish the details to show that these amounts were offered as income in the earlier years. During the course of appellate proceedings, the assessee could not furnish any details to satisfy the conditions of sections 36(1)(vii) rws 36(2) of the Income Tax Act . 9.3 Further, it is submitted that no such information was ever asked for in the course of appellate proceedings. He submitted that the claim of bad debts needs to be allowed in view of the following judgments: (i) CIT vs. Ahmedabad Electricity Company Limited (262 ITR 97(Guj.) (ii) Jethahirji and Jethabhaj Ramdas vs. CIT (120 ITR 792)(Bom). (iii) Kamala Cotton vs. CIT (226 ITR 605)(Guj.) (iv) TRF Limited vs. CIT (2010) 323 ITR 397(SC) (2010) 190 Taxman 321(SC). (v) Southern Technologies Limited vs. Joint CIT (20120) 320 ITR 577 (SC). 10. Regarding disallowance of claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmal business activities. The Commissioner of Income-tax(Appeals) ought to have considered the fact that in the subsequent years the business activities of the company have been revived and consequently, as the business of the company has been started again, the loss from business activities should be allowed. The above sales have been supported by sale bills and TNVAT Returns and which have been over looked by the assessing authority also. 13.2 The Commissioner of Income-tax(Appeals) ought to have considered the fact that the licenses and registrations such as Sales Tax (TIN) were all in currency and this indicates that the company is engaged in the process of revival activities. The Commissioner of Income-tax(Appeals) ought to have considered the fact that the company has vehemently contested the winding up order passed by BIFR before the High Court of Madras and the company has got favourable by dismissal winding up order of BIFR. This clearly shows the company s genuine intention of reviving its business activities. In l.VE. Vairavan Chettiar v. CIT (1969) 72 ITR 114, the Madras High Court held that maintaining the establishment and waiting for improved market conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported by sale bills and TNVAT Returns and which have been over looked by the assessing authority also. The Commissioner of Income Tax (Appeals) ought to have considered the fact that the licences and registrations such as Sales Tax (TIN) were all in currency and this indicates that the company is engaged in the process of revival activities. The CIT(Appeals) ought to have considered the fact that the company has vehemently contested the winding up order passed by BIFR before the High Court of Madras and the company has got favourable by dismissal winding up order of BIFR. This clearly shows the company s genuine intention of reviving its business activities. 15. Regarding the disallowance of commission payment, the learned DR has made very elaborate submissions. The Assessing Officer in his assessment order has stated The AR was specifically asked to produce the list of persons engaged in the transfer of land to M/s Alliance Mall Developers Co. Pvt. Limited. The assessee vide letter dated 6.12.2011 has submitted the details of commission paid to 51 persons totaling to ₹ 1,98,17,992/- . The Assessing Officer based on this information verified few of the persons namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for allowing deduction in respect of commission payment that there should be evidence of some services being rendered . The AR could not specify the services rendered by any agents and also did not produce any of the agents to whom commissions were paid for necessary verification during the course of appellate proceedings. It is also surprising that 51 persons who are closely associated with the MD were paid these commission payments without services being rendered by these persons, and prayed to confirm the disallowance made by the Assessing Officer. 17. Regarding the disallowance of payment made to workmen, the ld. DR submitted that the assesse company was incurring losses from the year 1989 and was closed because of workmen agitation in the year 1991. The workmen compensation / retrenchment were on account of business liability of the assesse company. It has nothing to do with the transfer of the property done by the company. A letter was also addressed to the assesse company on 24.01.2013 wherein clarifications were sought from the assesse company. As seen from the Memorandum of Compromise, wages were to be paid from June to December 1993. The bonus was to be paid for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Baroda as on 28.4.2007 was ₹ 34,83,76,311/-. It is also seen from the credit facilities of Bank of Baroda, the security agreement shows the hypothecation of stocks, book debts, plant and machinery, pledge of stocks, equitable mortgage of factor land and buildings. It is pertinent to see from the nature of loan obtained by the assessee that they were in the nature of cash credit and term loans. Term loans are usually utilized by the company for purchase of plant and machinery and other assets of the company. The assesse could have claimed depreciation in the earlier years on the assets purchased from the loans taken by the company. The major amount was on account of term loans and also demand loans. As on 31.10.1991 only, the assessee had given equitable mortgage of all the fixed assets of the company and the charge on the equitable mortgage was originally credit on 16.7.1982 which was modified from time to time. The equitable mortgage of fixed assets of the company was modified in May 1991 by reduction of charge from ₹ 6,04,71,000/- to ₹ 5,94,51,000/- and extension of charges for securing sufficient demand loans of ₹ 10,00,000/- thereby increasing the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one time settlement and received the amount of ₹ 18 crores towards the one time settlement in no lien account. This clearly proves that the assesse has received ₹ 18 crores from the prospective buyer i.e., M/s Alliance Mall Developers Co. Pvt. Ltd. before approaching the High Court to sell the vacant lands. Since the BIFR proceedings are pending before the High Court, the assesse has filed the application before the High Court to permit the assesse to sell the vacant land. This clearly proves that the payment to the bank is not an expenditure related to the transfer of the property. As seen from the information filed during the course of assessment proceedings, a letter was filed from the Bank of Baroda (August 6, 2012) stating that the said finance limits have been closed and settled in full, out of the sale proceeds of the property on 17.12.2007. A letter was addressed by the Bank of Baroda on 17th December 2007 to M/s Alliance Mall Developers Co. Pvt. Ltd. stating as follows : As per your letter of even date addressed to us, we state that we have debited your account for the sum of ₹ 18 crores only against the one time settlement of ₹ 18 crores in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders of the lower authorities. 20. We have heard both the parties and perused the material on record. The claim of the assessee in this appeal is with regard to payment of ₹ 18 crores to Bank of Baroda and ₹ 8,07,43,083/- to workmen as a deduction out of consideration received from sale of capital asset. 21. Under sec.48 of the Act, the income chargeable under the head capital Gains shall be computed by deducting from the full value of the consideration received or accrued as a result of the transfer of asset following the amounts viz., i) expenditure incurred wholly and exclusively in connect ion with such transfer, ii) the cost of acquisition of the capital asset and cost of any improvement thereto. Sec.48 of the Act, broadly contemplates three amounts for the purpose of computing income chargeable under the head Capital Gains . The first is the full value of the consideration for which the capital assets has been transferred. The second is the expenditure incurred wholly and exclusively in connection with such transfer and the third and last is the cost of acquisition of the capital asset including the cost of any improvement thereto. 22. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure incurred wholly and exclusively for transfer of capital asset and was deductible in computation of capital gain; amount reimbursed by the vendee towards such claim constitute part of sale consideration but deductible while computing capital gain. Similar view was taken by the Bombay High Court in the case of CIT v. Abrar Alvi (247 ITR 312). Further, Calcutta High Court in the case of Gopee Nath Paul And Sons And Another v. DCIT (278 ITR 240), held that the criteria is the perfection of title in order to effect the sale. In that case, without removing the liability of the Allahabad Bank, the title of the purchaser could not be perfected. Having regard to the facts and circumstances of that case and the position in law, the meeting of the liability of the Allahabad Bank relating to the assets of Gobindo Sheet Metal was an expenditure incurred wholly and exclusively in connection with the transfer. Further the Delhi High Court in the case of CIT v. Eagle Theatres (205 taxman 278), wherein it was held that the amount paid to the tenants for vacating the premises for effecting the sale of building is required to be deducting in computing the capital gains of the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In our opinion, the reason given by the AO to deny the payment of commission is not proper. It is not unusual that both, purchaser and seller having separate brokers or middlemen to complete the transaction of transfer. The CIT(Appeals) has given a finding that the assessee has not produced brokers to show that they have rendered services. The power of the CIT(Appeals) is coterminous that of the AO and he should have issued summons, once the assessee has furnished the names and addresses of the parties. This exercise has not been done by the revenue authorities. Hence, out rightly disallowing the entire commission payment is not appropriate. However, there is lapse on the assessee also as noticed by the AO as mentioned in earlier para. In our opinion, the payment of commission of ₹ 1,98,17,992/- is very excessive. As per trade practice, when the transaction of such volumes took place, usually in real estate field, commission payment is at one percent of the sale value of the property would be paid. Accordingly, we direct the AO to allow one percent of the total sale value of the property as commission payment towards transfer of property. This ground is partly allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently the business loss arising out of the business activities should be set off against the capital gain on sale of business assets. 29. In our opinion, the assessee deposited certain fund out of the amount received from sale of land and interest earned from that deposit as income from other sources and in view of the judgment of the Supreme Court in the case of Tuticorin Alkali Chemicals And Fertilizers Ltd. v. CIT (227 ITR 172), wherein it was held that interest earned by the assessee on short term deposit in bank out of term loan is income under the head other sources . Hence, this issue is dismissed. 29.1 In the result, the assessee s appeal in ITA No.1216/Mds/2013 is partly allowed for statistical purposes. ITA N0.2106/Mds/13: 30. The first ground in this appeal is with regard to the disallowance of the claim of expenditure towards payment of commission at 100% and site clearing charges at 75% while calculating long term capital gains. 31. The facts of the case are that the assessee has disposed off land measuring about 10.98 acres. The assessee has also realised that all the plant and machineries which in turn became rusty due to years of non-operation and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er evidence and disallowance ₹ 48,80,215/-. 34. On appeal, the CIT(Appeals) observed that these amounts are paid by cash. However, the vouchers have been made in the month of April to June 2009 but the ledger shows cash payments were made in March 2010. According to the CIT(Appeals), the daily wage labour does not wait for so much time to receive wages. However, there is no evidence to show that the assessee engaged in labour contract to carry out this work. Hence, CIT(Appeals) directed the AO top allow 25% of the expenditure on account of site clearing charges. Against this, the assessee is in appeal before us. 35. The ld. AR, submitted that the CIT (A) ought to have seen the comprehensive list of persons to whom such payments have been made together with corresponding quantum of payments made to each of such persons. All the payments were made by account payee crossed cheques and all the payments were subjected to TDS requirements as required. It is also submitted position and well settled position of law that payment of commission to brokers for facilitating smooth transaction would fall under the category of the expenditure incurred wholly and exclusively in connec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner. These personnel did not normally come and work regularly but were coming and working erratically. Besides they had to be paid in cash only. However the CIT (A) has allowed only 25% of the expenditure for the cleaning charges. The CIT (A) ought to have allowed fully the expenditure. According to the ld. AR the CIT (A) wrongly allowed only 25% Learned Assessing Officer has grossly erred in disallowing all the claims of the Assessee on the commission payment made to facilitate conclusion of the sale of immovable property u/s 48(i) of the Act, and site clearing charges also under sec. 48(i) of the Act, drawing untenable non-existent inference, purely based on suspicions, surmises, conjectures, presumption of bad faith etc., which runs contrary to the facts obtaining very much from the return of income and explanations offered. 36. On the other hand, the ld. DR relied on the findings of the CIT(Appeals). 36.1 We have heard both the parties and perused the material on record. The issue relating to the payment of commission was already decided by us in ITA No.1216/Mds/13 for the assessment year 2009-10. Accordingly, we direct the AO to allow commission payment at 1% of the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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