TaxTMI 
TaxTMI 
TaxTMI 
2005 (10) TMI 231
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....urther notes in the assessment order that the assessee vide letter dt. 20th Nov., 1999 admitted that there was no evidence with him regarding the purchase of shares. The AO also notes in the assessment order that the assessee was called upon to furnish evidence of having invested the gain in the construction of a residential house to the extent of Rs. 2,47,740, i.e., the amount of exemption claimed under s. 54F. The assessee submitted that the reinvestment, as per s. 54F was made by the assessee towards the construction of a residential house at 70-71-72, Ashoka Park, New Delhi and referred to the capital account appearing in the books of account of his proprietary concern for the instant year as also the earlier years to substantiate the said appropriation of money towards construction of the new house. A copy of the same has also been filed before us in the paper book and is placed at p. 8. The AO, however, noted that only an amount of Rs. 81,300 was shown to have been spent towards the construction of building during the year in the said capital account. He, therefore, restricted the exemption under s. 54F to the said amount, thereby bringing to tax the balance capital gain of R....
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.... gain from the sale of shares as a long-term capital gain, which was admitted by the AO, while the CIT(A) had merely considered it to be short-term capital gain. A long-term capital gain and the short-term capital gain are treated differently under the statute. The CIT(A), therefore, by changing the character of the income has sought to bring to tax a new source of income, which was impermissible. 4. Before arguing on the merits, the learned counsel referred to the application of the assessee made under r. 29 of the ITAT Rules, 1963 with respect to the admission of additional evidence. The additional evidence is in the shape of a letter dt. 30th June, 1994 addressed by Castrol India Ltd., the investee company to the assessee to demonstrate that the shares sold by the assessee were held by him for a period of more than 12 months. According to the learned counsel, this would demonstrate that the gain resulting on account of the sale of such shares was a long-term capital gain and, therefore, the view of the CIT(A) in not accepting the character of income as a long-term capital gain was contrary to the factual position. With regard to the justification for admission of the said addit....
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.... the shares mentioned in the said dividend warrant. Ostensibly, the power of the Tribunal in terms of r. 29 to admit fresh evidence entails an element of discretion which is required to be exercised in a judicious manner. The powers of the Tribunal to admit additional evidence are not only in situations where the evidence could not be produced before lower authorities owing to lack of adequate opportunity but also situations where the fresh evidence would enable the Tribunal to pass order or for any other substantial cause. Of course, the power of the Tribunal is to be exercised judiciously and for reasons to be recorded. In the instant case, we find that the present evidence seeks to demonstrate that the shares sold by the assessee were indeed held by it for more than 12 months, thereby qualifying to be a long-term capital asset. Although the said assertion has been consistently made by the assessee before the lower authorities on the basis of a dividend warrant. The dividend warrant, according to the CIT(A), was not clear inasmuch as the distinctive number of shares mentioned therein could not be co-related with the shares sold, leading, therefore, to an obscurity in a fact posit....
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....e was no stipulation that the same be also used as a residential house. It was submitted that the letting out for commercial purposes was only a temporary phenomenon and does not distract from the fact that the property remained a residential property. With regard to the stand of the CIT(A) that the plan of construction itself does not demonstrate that the property was to be used as residential property, the assessee submitted that there was no basis to arrive at such fact situation. 7. On the other hand, learned Departmental Representative has relied on the orders of the CIT(A) on this issue. Learned Departmental Representative submitted that what was constructed by the assessee was not a residential house. It was submitted that the CIT(A) noted that in the super structure constructed by the assessee, there was no provision for any kitchen facility and, therefore, it could not qualify to be a residential house. Learned Departmental Representative also submitted that the claim of the assessee was not in keeping with the intention of the legislature under s. 54F of the Act. 8. We have considered the rival submissions carefully and in our view having regard to the circumstances of ....
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....ot to have constructed a residential house, no deduction shall be allowable to the assessee and the AO shall be at liberty to pass such orders as is in accordance with law. Thus, the assessee partly succeeds on this ground, as above, for statistical purposes. 10. The second issue taken by the assessee is with regard to the action of the CIT(A) in disallowing commission payment of Rs. 80,000 paid to the broker. The facts are that the assessee rented out its property at a sum of Rs. 5,52,000 against which it claimed the deduction of Rs. 80,000 representing payment made to the broker. The assessee submitted that the said amount was paid to the broker towards services rendered by him for letting out of the property. The AO disallowed the claim on the ground that it was not in terms of any statutory provision. The CIT(A) has since sustained the addition on the following ground: "I have considered the facts of the case and have also gone into the decisions relied upon by the learned Authorized Representative. As regarding the Orissa High Court decision it does not help the case of the appellant because in this case the Hon'ble Court had held that the deductions for repair etc., are to ....