TMI Blog2022 (11) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance by observing that when the assessee has bought the land in question from the government of Rajasthan, it is the duty of the government to give the assessee clear and peaceful possession of this land and moreover assessee has been claiming this deduction on account of compensation paid to the taparies year on year and it does not fit into the scheme of a business ordinarily run by a prudent businessman to allow the encroachment of his land every year and then to claim the compensation - HELD THAT:- Every businessman s endeavor is to run the business without any litigation etc. and they have brought on record the complete list and compensation amount paid to the said taparies and the entire payment has been made through banking channel and in these circumstances the Ld. CIT(A) is not allowed to decide the issue merely on the basis of conjuncture and surmises without controverting the evidence brought on record by the assessee. So following the earlier order decided by the Tribunal we hereby set aside the findings returned by Ld. CIT(A) and direct the AO to delete the disallowance made/confirmed in this case on account of compensation paid to taparies. Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be treated to have been incurred for business purposes except the expenses stated to have been incurred for visiting Bangkok, to which country assessee has neither any export of its product nor any type of import from Bangkok. So in these circumstances, we are of the considered view that the Ld. CIT(A) has rightly disallowed small portion of expenses claimed by the assessee towards element of personal views. So we find no reason to interfere into the adhoc disallowance made by the Ld. CIT(A) in the impugned order. Addition on account of interest income earned by the assessee company from Jaiput Vidyut Vitran Nigam Ltd. (JVVNL) as shown in the form 26AS - case of the assessee that the interest in question has been earned from security deposit kept with JVVNL which has been duly offered to tax in the subsequent years and TDS has also been claimed - HELD THAT:- When interest income has been duly offered to tax in the subsequent years and TDS has also been claimed in the next years there is no reason to disallow the same. Moreover, the assessee has been paying income tax at the same rate. Identical issue has been dealt with by the Hon ble Delhi High Court in case of CIT vs. M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made u/s.50C of the Act of Rs. Rs.21, 73,350/- is unjustified and liable to be deleted. 2. The Ld. CIT(A) failed to appreciate that as per the provisions of section 50C of the Act, the AO was duty bound to call for the report from the DVO before making the addition of the differential amount and hence, the addition made under section 50C of the Act of Rs.21,73,350/- is without any justification and liable to be deleted. B. Disallowance of compensation paid on Taparies -Rs.42,22,000/- 3. The Ld. C1T(A) has erred in upholding the disallowance made by AO in respect of compensation paid Rs.42,22,000/- to tapries (encroachers) on the ground that the appellant was not required to pay such amount to unauthorized occupiers of land and cannot be allowed as revenue expenditure without considering the fact that hon'ble 1TAT, Jaipur bench has already allowed such compensation paid on tapries in the case of Appellant itself for the A.Y. 2008-09 under ITA no. 497/JP/2012 order dt 8.1.16 which also has been taken on record and the Ld. CTT(A) is bound to allow the expenses based on 1TAT Order, hence, disallowance of compensation paid to encroachers is without any justification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the foreign travel was undertaken to meet existing customers and explore the market potential of various types of natural stone and also to contact such suppliers so that the stones could be imported and hence, the expenses is incurred wholly and exclusively for the purposes of the business of the appellant company and thus, the disallowance of Foreign Traveling Exp. amounting to Rs, 3,00,000/- due to personal use is without any justification and liable to be deleted. F. Addition of undisclosed receipts as per Form 26AS -Rs.54,587/- 11. The Ld. CIT(A) has erred in upholding the addition made by AO towards undisclosed receipts of the appellant as per Form 26AS without appreciating that no addition could be made merely on the basis of Form 26AS and that there is no such undisclosed receipts in the hands of the appellant and hence, the addition made on the basis of form 26AS is without any justification and liable to be deleted. G. Disallowance out of raising and mining expenses -Rs.5,00,000/- 12. The Ld. C1T(A) has erred in upholding the disallowance made by AO to the extent of Rs. 5,00,000/- out of the Rs.l 0,00,000/- in respect of raising and mining expenses on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case and law applicable thereto. Ground No.1 2 of ITA No. 2400 2401/M/2021 for A.Y. 2011-12 A.Y. 2012-13 respectively 6. AO noticed from the profit loss account that assessee has shown profit on sale of assets under the head other income amounting to Rs.40,07,800/- Rs.24,00,023/- for A.Y. 2011-12 2012-13 respectively. AO noticed from the details filed by the assessee that there is a difference between the sale value shown in the registered documents vis- -vis stamp duty value. On failure of the assessee to furnish any supporting evidence that it has only sold land and not land with constructed premises AO made addition of Rs.21,73,350/- Rs.1,42,400 for A.Y. 2011-12 2012-13 being the difference in the sale consideration under section 50C of the Act respectively. 7. The Ld. CIT(A) upheld the findings returned by AO by emphasizing the fact that as per sub registrar and stamp valuation authority the value of this land was worked out at Rs.29,49,600/- Rs.6,62,400/- for A.Y. 2011-12 2012-13 respectively thus rightly added by the AO. 8. The Ld. A.R. for the assessee challenged the impugned findings returned by the Ld. CIT(A) on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been settled in favour of the assessee by the Revenue, vide order dated 14.12.2019 26.02.2021 available at page 32 to 43 of the paper book for A.Y. 2011-12, by way of framing assessment under section 143(3) of the Act and relied upon the order passed by the Tribunal in assessee s own case in ITA No.497/JP/2012 order dated 08.01.2016 for A.Y. 2008-09. 12. Ld. D.R. for the Revenue relied upon the orders passed by the Ld. CIT(A). 13. We have perused the order passed by the co-ordinate Bench of the Tribunal in assessee s own case on the identical issue which is decided in favour of the assessee by returning following findings: 3.1 Assessee is engaged in the business of mining of Kota stone since 1945, having a huge mining area of 9.991 Sq.Km. allotted by The Mines Geology Department, Government of Rajasthan. The mining leases comprise of own purchase land, government land, Charagah land, agriculture land, wells, along with encroached, authorized and unauthorized houses, taparies etc. Every year a certain area is opened for mining which requires removal of such unauthorized encroachment as a business necessity. Like earlier years, assessee in this year paid Rs.21000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be on revenue account, provided the expenditure does not acquire any capital asset. - Revenue Expenditure. 5. [(1994) 210 ITR 222 (Cal)] CIT v/s Auto Distributors Ltd - Payment made to obtain vacant possession of a building was not capital expenditure but was incurred wholly and exclusively in the course of business and allowable as such. 6. [(1978) 114 ITR 434 (Cal)] CIT v/s Deluxe Film Distributors Ltd. - Held - Amount paid for clearing title in the course of carrying on of business is for commercial expediency and therefore, allowable. 14. When the issue in question has already been decided in favour of the assessee by the Tribunal vide order dated 08.01.2016 in A.Y. 2008-09 and has not been challenged further and even in subsequent years i.e. 2017-18 2018-19 it is further allowed by Rrevenue itself by framing assessment under section 143(3) of the Act, there is no ground for the Revenue to not follow the rule of consistency . 15. Moreover, every businessman s endeavor is to run the business without any litigation etc. and they have brought on record the complete list and compensation amount paid to the said taparies and the entire payment has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handelwal, Shweta Khandelwal, Sunita and Taranjeet Kaur etc. It appears that some family members of these ladies have also been paid commission like Aproova Khandelwal, Promod Kumar Soni, Dalveer Singh etc. Therefore firstly it is not clear as to what kind of services were rendered by the above mentioned ladies for which the commission had been paid to them and secondly it is also not clear whether they were capable of rendering such services like whether they were sufficiently qualified had sufficient expertise or experience so that they could have procured sales orders and could have managed payment of accounts by respective buyers. The assessee had failed to give any satisfactory reply to these questions. The assessee only claims that the commission has been paid to various parties on the basis of sales carried out by them and whosoever bought better sale rates, was given higher commission. However no evidence in this regard has been given by the assessee. Therefore I am not satisfied with the varied rates of commission paid by the assessee. Besides rate of payment of commission at the rates 1296, 13% and 35% appears to be too high. Therefore considering overall facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed by the Ld. CIT(A). 21. We are of the considered view that when vehicles in question though registered in the name of CMD but are part of its fixed assets and entire payment has been made through books of accounts which have not been disputed by the AO and keeping in view the rule of consistency as in the earlier years and in the subsequent years adhoc disallowance has been made at 10% of the total expenses on vehicles by considering the personal use of vehicles, the AO is directed to disallow 10% of the expenses claimed by the assessee. The impugned order passed by the Ld. CIT(A) on this ground is accordingly modified. Ground No.10 of ITA No.2400/M/2021 for A.Y. 2011-12, Ground No.10 of ITA No.2401/M/2021 for A.Y. 2012-13, Ground No.4 of ITA No.2402/M/2021 for A.Y. 2013-14 Ground No.4 of ITA No.2399/M/2021 for A.Y. 2014-15 22. The assessee being in business of mining of kota stones which the assessee claimed to have exported to UK, USA, Italy, Israel etc. The assessee has also imports from various countries. The assessee claimed foreign travel expenses incurred on the foreign trade stated for the purpose of meeting foreign parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also been claimed in the next years there is no reason to disallow the same. Moreover, the assessee has been paying income tax at the same rate. Identical issue has been dealt with by the Hon ble Delhi High Court in case of CIT vs. M/s. Vishnu Industrial Gases P. Ltd. and has been decided in favour of the assessee. So we order to delete the addition made by the AO on account of undisclosed receipt as per form 26AS for A.Y. 2011-12, 2012-13, 2013-14 2014-15. So Ground No.11 of ITA No.2400/M/2021 for A.Y. 2011-12, Ground No.11 of ITA No.2401/M/2021 for A.Y. 2012-13, Ground No.5 of ITA No.2402/M/2021 for A.Y. 2013-14 Ground No.5 of ITA No.2399/M/2021 for A.Y. 2014-15 are decided in favour of the assessee. Ground No.12 of ITA No.2400/M/2021 for A.Y. 2011-12, Ground No.12 of ITA No.2401/M/2021 for A.Y. 2012-13, Ground No.6 of ITA No.2402/M/2021 for A.Y. 2013-14 Ground No.6 of ITA No.2399/M/2021 for A.Y. 2014-15 26. The assessee claimed raising and mining expenses on estimated adhoc basis in all the years under consideration, qua which AO called for details and examined the same. AO found that in some of the expenses complete details of address ..... X X X X Extracts X X X X X X X X Extracts X X X X
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