TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 702
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng. During the year under appeal, the assessee earned rental income, dividend income, interest income, profit from partnership firm and capital gains on sale of flat. The assessee stated that there were two office units : Unit No. 407A measuring about 284 Sq.ft and the adjoining Unit No. 407B measuring about 850 Sq.ft - both aggregating to 1134 Sq.ft and that the entire Unit No. 407 was sold during the year under appeal. It was also pleaded that Unit No. 407A was held as Capital Asset and Unit No. 407B was held as Stock in Trade in the books right since the beginning. The Hon'ble Calcutta High Court approved the order of amalgamation of various companies with the assessee company with effect from 1.4.2000. Accordingly, the assessee herein became amalgamated company and the other transferor companies became amalgamating company. One such transferor company is M/s Nice View Properties Private Limited whose assets got vested with the assessee due to amalgamation. The Pursuant to the amalgamation, the assessee carried over all the assets lying in the balance sheet of M/s Nice View Properties Private Limited in its books of accounts as on 1.4.2000 at book values. In the Audited Balance ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4.2000 and Unit No. 407B measuring about 850 Sq.ft held as Stock in Trade at book value of Rs. 10,48,320/- as on 1.4.2000 right since the beginning. As a matter of fact, these book values were the book values of M/s Nice View Properties Private Limited as on 31.3.2000 which, on amalgamation under order of Hon'ble High Court, Calcutta, were taken over by the assessee company as on 1.4.2000. The assessee had also enclosed the financial statements of M/s Nice View Properties Private Limited for the financial year ended 31.3.2000 to prove the authenticity of its claims and also that of the assessee company for the financial year ended 31.3.2001. We find that since the beginning , Unit No. 407A is being held as Capital Asset and Unit No. 407B is being held as Stock in Trade by the assessee. Hence the objection raised by the Learned AR about the applicability of provisions of section 50C of the Act on asset held as stock in trade (Unit No. 407B) is appreciated and justified. We find that the Learned AO had simply disregarded the stand of the assessee by observing that a single unit (i.e Unit No. 407) cannot be divided as capital asset and stock in trade as shown by the assessee. We find ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the facts and circumstances of the case. 3.1. The brief facts of this issue is that the assessee claimed that Rs. 11,44,634/- was spent for development of the property that were subjected to sale during the asst year under appeal. The Learned AO deputed his Inspector to verify the persons who performed the work. In the assessment order, the Learned AO had observed that the Inspector collected the profit and loss account and IT return details from the concerned parties except one, Anup Kr.Sukla. The Learned AO further observed from the IT returns of those parties that they had done work only for the assessee and they had not done any work before for any other persons and they had disclosed the amount received from assessee as income from other sources. The Learned AO issued summons u/s 131 of the Act to those parties and found that even the Inspector could not serve the same on the parties. Consequently the assessee was directed to produce the parties together with their bank statements for the last three years to prove that they had performed the work for the assessee. Since nobody appeared before the Learned AO, he disallowed the entire development expenses of Rs. 11,44,634/- in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4,634/-. " 3.2. The Learned DR relied on the order of the Learned AO. In response to this, the Learned AR vehemently relied on the order of the Learned CIT(A). 3.3. We have heard the rival submissions and perused the materials available on record. We find that the Learned CIT(A) had given categorical finding with regard to the fact that all the parties had duly shown the development receipts received from assessee in their returns which were also subjected to TDS , wherever applicable. We find that the revenue had not brought any evidence on record to prove that the development work on the property was never carried out by the assessee through these parties. It only alleged that the parties had not done any development work in the past and had done only for the assessee during the asst year under appeal. This observation of the Learned AO had been found to be irrelevant consideration by the Learned CITA which has not been controverted by the Learned DR before us. With regard to the non-availability of Mr.Anup Kumar Shukla at the time at which Inspector visited his premises, we find that the Learned CIT(A) had observed that no person could be expected to always remain available a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned DR prayed that the additional evidences admitted by the Learned CIT(A) were never submitted before the Learned AO and hence prayed for set aside of this issue to the file of the Learned AO, for which the Learned AR fairly agreed. Hence we deem it fit and appropriate, in the interest of justice and fairplay, to set aside this issue to the file of the Learned AO, to decide this issue afresh, in accordance with law, in the light of evidences and documents submitted by the assessee before him. Needless to mention, that the assessee be given reasonable opportunity of being heard. The assessee is directed to fully cooperate with the Learned AO in furnishing the necessary evidences and documents before the Learned AO for early disposal of the set aside proceedings. Accordingly, the ground no. 3 raised by the revenue is allowed for statistical purposes. 5. The next issue to be decided in this appeal is as to whether the Learned CIT(A) is justified in deleting the disallowance of expenses of Rs. 4,33,699/- in the facts and circumstances of the case. 5.1. The brief facts of this issue is that the assessee claimed the following as business expenditure :- Office Rent Rs.51,240/- T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es are regularly incurred for the purpose of business of the assessee in its normal course. Hence we do not find any infirmity in the order of the Learned CIT(A). Accordingly, the ground no. 4 raised by the revenue is dismissed. 6. The last ground to be decided in this appeal is as to whether the disallowance u/s 14A of the Act could be made in the sum of Rs. 74,315/- in the facts and circumstances of the case. 6.1 The brief facts of this issue is that the assessee earned dividend income of Rs. 4,639/- and did not offer any amount for disallowance u/s 14A of the Act. The Learned AO invoked Rule 8D(2)(iii) of the IT Rules and calculated the disallowance u/s 14A of the Act at Rs. 74,315/-. On first appeal, the Learned CITA reduced the same to Rs. 45,188/- by reducing the average value of investments in commercial flats as not eligible for disallowance under Rule 8D(2)(iii) of the Rules. Aggrieved, the revenue is in appeal before us on the following ground:- "5. On the facts and in the circumstances of the case, the ld.CIT(A)-VIII erred in law in deleting the addition u/s. 14A of Rs. 29,127 as non-business expenses." 6.2. The Learned DR vehemently relied on the order of the Lear....