Tribunal validates capital gains computation, disallows expenses, and dismisses appeal.

The tribunal upheld the AO's computation of short term capital gains based on the registered sale deed, rejecting the appellant's arguments regarding the unregistered MoU. Additionally, the tribunal supported the CIT(A)'s decision to disallow a portion of other expenses incurred in cash due to non-compliance with section 40A(3) of the Act. Consequently, the appeal filed by the assessee was dismissed by the tribunal on 14th October 2022 in Chennai.

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Issues:
1. Computation of short term capital gains based on unregistered MoU and sale deed.
2. Disallowance of other expenses incurred in cash.

Issue 1: Computation of Short Term Capital Gains:
The appellant contested the addition of Rs. 53,12,025 made by the AO as short term capital gain, arguing that the CIT(A) did not consider all submissions. The case involved the transfer of property and the computation of capital gains. The AO rejected the MoU submitted by the assessee and considered the sale deed, fixing the sale consideration at Rs. 73,81,185. The CIT(A) upheld the AO's decision, stating that the MoU was unregistered and involved related parties. The tribunal agreed, emphasizing that the registered sale deed showed the property was purchased for Rs. 16,75,000 and transferred for Rs. 20,69,160. The AO's computation based on the sale deed and section 50C provisions was deemed correct. Consequently, the tribunal upheld the CIT(A)'s decision, dismissing the appellant's appeal.

Issue 2: Disallowance of Other Expenses:
Regarding the disallowance of other expenses of Rs. 17,721, the AO had disallowed a portion of total expenses incurred in cash due to lack of evidence. The CIT(A) upheld the disallowance for expenses incurred in cash, citing violation of section 40A(3) of the Act. The tribunal noted that the appellant failed to provide sufficient evidence to justify cash expenditures exceeding the prescribed limit. Therefore, the tribunal agreed with the CIT(A)'s decision to sustain the disallowance of Rs. 17,721. The appeal on this issue was rejected, affirming the CIT(A)'s findings.

In conclusion, the tribunal upheld the AO's computation of short term capital gains based on the registered sale deed and rejected the appellant's arguments regarding the unregistered MoU. Additionally, the tribunal supported the CIT(A)'s decision to disallow a portion of other expenses incurred in cash due to non-compliance with section 40A(3) of the Act. Consequently, the appeal filed by the assessee was dismissed by the tribunal on 14th October 2022 in Chennai.

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