TaxTMI 
TaxTMI 
2015 (3) TMI 394
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.... 3. The relevant facts as culled out from the material on record are as under. 4. Assessee is an individual stated to be engaged in the business of trading of land and shares. Assessee filed his return of income for A.Y. 2009-10 on 31.10.2009 declaring total income of Rs. 11,74,204/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 30.12.2011 and the total income was determined at Rs. 2,27,67,920/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 24.12.2012 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and Assessee has also filed a C.O. The grounds raised by Revenue reads as under:- 1. The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts' in accepting the 'Samjuti Karar' as valid transfer document. 1A The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the addition made in the hands of Assessee on account of 100% profit in document price of land sold as against 25% offered by Asse....
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.... noted that DVO in his report has worked out the fair market value of the land on the date of sale to be Rs. 9,30,00,000/- He was therefore of the view that Assessee has under valued the sale price to the extent of Rs. 2,65,87,800/-. He thereafter worked out the share of Assessee on the basis of the sale consideration amount determined by the DVO and after giving the credit for the amount shown by the Assessee, considered the difference amount of Rs. 2,06,63,064/- as income of the Assessee. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A). Ld. CIT(A) after considering the submissions of the Assessee decided the issue in favour of the Assessee by holding as under:- 5.1.2 On the basis of above discussion and consideration of facts following conclusion can be drawn: (a) The A.O.'s contention that family agreement (Samjuti Karar) dt. 01/08/07 is a part of planning is not substantiated. The A.O. failed to highlight the evasion of tax through such planning. (b) Appellant as well as other family members are in the business of real-estate i.e. purchase & sale of land apart from other business and the income derived from sale of land is taken under ....
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....rmance u/s 53A of T. P. Act are available. It is only in the provisions of capital gain, owner ship through registered deed has to be considered. The real estate business do recognizes purchase & sale through 'Agreement to sale' (Bana Khat) or 'proposal for sale (Bana Chitthi) with various intermediary before the final purchaser or utilizes. It is in this respect, deeming provisions of section 50C of the Act for replacement of sale consideration in actual by the valuation adopted by stamp valuation authority comes in to play. No such deeming provisions are there under the head 'income from business & profession. (f) The profit out of sale of these land is duly reflected by the co owners in their respective return of income for their respective share. In one of the case the department has accepted the same. As far as purchase consideration are concerned, the appellant was having sufficient fund in the name of such co owner at the time of purchase as well as at the time of apportioning the money in the respective account. It is not that appellant utilized his own money for the purchases and later on recovered the money from co owner. The land records were also upgr....
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....n law. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A), we therefore find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue and the ground raised by Assessee in the C.O are dismissed. Ground no. 2 is with respect to deleting the disallowance of Rs. 6,70,519/- on account of interest expenses. 11.On perusing the Profit and Loss account, A.O noticed that Assessee has claimed interest expense of Rs. 6,70,519/-. The Assessee was asked to provide the nexus with evidence to prove that the interest bearing funds have been utilized to earn the business income. A.O noted that Assessee has not proved by furnishing any evidence that the amount borrowed was utilized to earn business income. He accordingly disallowed the claim of the Assessee. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A). Ld. CIT(A) decided the issue in favour of the Assessee by holding as under:- 5.3.11 The Ground No. 6.1 is related to disallowance of interest expenses in the absence of appellant's proper explanation to A.O,, who held that "there were no evidences with regard to utilization of the amoun....
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....ot justified. The A.O. is directed to allow the same and delete the addition of Rs. 6,40,519/- so made. The appellant gets relief accordingly. 12.Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 13. Before us, ld. D.R. pointed to the findings of A.O wherein the Assessee was asked to furnish the evidence to prove the evidences of utilization of funds for the purpose of business and which Assessee had failed to furnish. He therefore submitted that in such circumstances, the A.O was fully justified in making the addition. He thus supported the order of A.O. The ld. A.R. on the other hand reiterated the submissions made before ld. CIT(A) and supported his order. 14.We have heard the rival submissions and perused the material on record. We find that A.O while making the addition has noted that no details were furnished by the Assessee in support of his claim of interest for expenses. We find that before ld. CIT(A) Assessee had filed details on the basis of which the ld. CIT(A) has granted relief to the Assessee. Rule 46A of the I.T. Rules stipulate that CIT(A) for the reasons to be recorded, can admit the evidence produced by the Assessee in t....
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....ard the rival submissions and perused the material on record. In view of the aforesaid submission that the facts and circumstances of the case and ground no. 1 are identical to that of in ITA No. 736AHD/2013, we for reasons stated hereinabove, while deciding the case in ITA No. 736AHD/2013 and for similar reasons dismiss the ground of Revenue in the present appeal. 19. Ground no. 2 is with respect to disallowance of Rs. 14,32,167/- on account of various expenses like depreciation, interest expenses, salary expenses etc. 20.A.O noticed that Assessee had claimed various expenses aggregating to Rs. 14,32,167/- as listed at page 20 of the assessment order. He noted that there appear to be no business activity carried out by the Assessee and therefore there was no justification for claiming the expenses. He further noted that since the entire share of 6.25% of land consideration was added on substantive basis in the case of Mafatlal Patel, there appear to be no justification for claiming the expenses. He accordingly disallowed the same. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A). Ld. CIT(A) decided the issue by holding as under:- 5.3.11 Ground....