TaxTMI 
TaxTMI 
2014 (7) TMI 383
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.... the ld. CIT(A) erred by merely accepting the assessee's contention that reference to Shiv Mahal palace in the bills issued by M/s Megha Developers was only to mail all the documents to its present address at Baroda without appreciating the fact that Assessing Officer had made enquiries at Baroda which clearly confirm that Shiv Mahal Palace, old Padra Road, Baroda and land bearing survey No- 86(Part) admeasuring 3000 sq. m. are different properties and located 3 kms. away from each other. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. The Appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing Officer be restored. " 2. Assessee, an i....
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....ents and registration of the transaction. AO asked the assessee to state as to why whole of expenditure should be allowed. As per the AO no reasonable explanation was furnished as to why brokerage of Rs. 72, 05, 082/-has been paid. He held that expenditure incurred by the assessee was highly excessive and unreasonable, that MD had stated in their respective bills about the property situated at Sim village, that the local inquiries revealed that the Shiv Mahal Palace, Old Padra Road, Baroda, and land bearing Survey No. 86 (part) admeasuring 3, 000 sq. mts. were situated in the Sim of Village Jetalpur, Taluka and district Baroda were two different properties, that the said properties were at least 3 kilometers away from each other, that capi....
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....penditure should be allowed. As per the AO no reasonable explanation was furnished as to why brokerage of Rs. 72, 05, 082/-has been paid. He held that expenditure incurred by the assessee was highly excessive and unreasonable, that MD had stated in their respective bills about the property situated at Sim village, that the local inquiries revealed that the Shiv Mahal Palace, Old Padra Road, Baroda, and land bearing Survey No. 86 (part)admeasuring 3, 000 sq. mts. were situated in the Sim of Village Jetalpur, Taluka and district Baroda were two different properties, that the said properties were at least three kilometers away from each other, that capital gains were being shown from only one property, that charges paid for the other property ....
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....s of the assessee and the assessment order, he held that the impugned charges were paid in respect of only one property and not for two different properties as noted by the AO in his assessment order, that the property Shiv Mahal Palace was not part of the intended sale nor it was put for sale during the year under consideration, that the services were rendered by MD only in respect of the impugned property and not otherwise, that the assessee had furnished a detailed list of services rendered by MD. that from the details placed on record it was also noted that the impugned property was subject matter of litigation at least from the year 2006, that it was always the case that legal diligence had to be carried out while selling such large pi....
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.... that out of the total expenditure claimed the AO allowed Rs. 20 lakhs only, that the FAA directed the AO to allow full expenditure. First we would like to discuss the issue of existence of two properties. We find that though the AO mentions of local inquiry conducted about the property sold and the distance between the two properties i. e. Shiv Mahal and the plot of land, yet he has not disclosed the source of such inquries. The AO is sitting in Mumbai and for conducting 'local inquiry' at Baroda either he had to depute his inspector or had to ask his colleagues at Baroda to conduct inquiry. He had not mentioned how the inquiry was conducted at Baroda. Secondly, if he was in possession of such a vital piece of information what prevented h....
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....om the taxes. Due taxes cannot be determined in an arbitrary and whimsical manner. An one liner order; devoid of reasons for arriving at certain conclusions and fasting tax liability to a citizen;can not be termed a justifiable or defendable order. Disallowance of any expenditure not only increases the tax liability of an assessee. but it may also result in other serious consequences like levying of penalty and initiation of prosecution. Therefore AO. s should act in an unbiased and fair manner. In the case before us, we find that the AO had not followed a judicious approach. We find that the FAA has analysed the issue in proper prospective. Factors like assessee's stay in Mumbai, on - going litigation about the property, rendering of servi....