TaxTMI 
TaxTMI 
2016 (6) TMI 532
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....come - tax (Appeals) - 12, Mumbai, ["Id. CIT (A)"] erred in confirming the action of the Assessing Officer ["the A.O."] in framing the assessment order without affording reasonable and fair opportunity of being heard. 1.2 It is submitted that in the facts and the circumstances of the case, and in law, the appellate order was required to be held as bad in law on account of breach of the principles of natural justice. WITHOUT PREJUDICE TO THE ABOVE: 2.1 The Id. CIT (A) erred in confirming the action of the A.O. in disallowing of 50,000/-, being the business deduction claimed by the Appellant as demolition charges, by holding the same as non business expenses. 2.2 While doing so, the A.O. erred in: (i) Basing his action only on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations; and (iii) Ignoring relevant material and considerations. 2.3 It is submitted that in the facts and the circumstances of the case, and in law, no such disallowance was called for." The assessee company has raised an additional grounds of appeal as under: "4.1 The Assistant Commi....
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.... were the occupant of the plots since Last several years & had offered the same as business income. ***** Grounds of Appeals ***** ***** 4. Demolition Expenses Rs. 50,000/- The ACIT erred in disallowing demolition charges of Rs. 50,000/- as non Business Expenses. The appellant submits that the above Expenses have been paid to BMC i.e. Bombay Municipal Corporation and the Receipt of the same had been submitted during the assessment proceedings. The appellant submits that only on handing over of vacant land to BMC the Saleable FSI would be granted & hence the demolition of unauthorized hutments is a genuine Business Expenditure. Also the same has been paid to State Govt. Authorities. ***** *****" With regard to the demolition charges of Rs. 50,000/- disallowed by the AO by treating the same as non business expenses , before the learned CIT(A), the assessee company contended that Rs. 50,000/- was paid to the BMC and the receipt was submitted before the AO during the assessment proceedings . The assessee company submitted as an additional evidences before learned CIT(A) , correspondence and let....
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....r establish that the concerned payment of Rs. 50,000/- to BMC was in respect of business carried on by the assessee company and hence the learned CIT(A) upheld the assessment orders dated 12.12.2008 passed by the AO u/s 143(3) of the Act, vide appellate orders dated 29.10.2010. 6. Aggrieved by the appellate orders dated 29.10.2010 of the learned CIT(A), the assessee company filed second appeal before the Tribunal. 7. The ld. Counsel for the assessee company submitted before the Tribunal that the assessee company has incurred demolition expenses of Rs. 50,000/- for which the disallowance has been confirmed by the learned CIT(A). The learned Counsel submitted that the development expenses with respect to the same property and evacuation expenses for removal of illegal occupants from the same property granted to the assessee company by the Collector in 1968 as set out in SOF above has been allowed by the learned CIT(A) , whereas the demolition expenses of the illegal structures from the same property was disallowed by learned CIT(A) on technical grounds that the receipt issued by BMC is in the name of Architect of the assessee company. The learned counsel for the assessee compan....
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....he assessee company as business expenses through its architect paid to BMC towards demolition of illegal structure on its plot of land. We donot find any merit in the contentions of the Revenue as on the one hand development expenses and evacuation expenses with respect to the same piece of land was allowed by learned CIT(A) as business expenses , which orders of the learned CIT(A) is not contested by the Revenue as no second appeal is filed by the Revenue against the orders of learned CIT(A) before the Tribunal , and merely because the receipt for demolition expenses for demolishing the illegal structure on the same piece of land is in the name of the architect, the same cannot be held to be non-business expenses and disallowed by the Revenue. We order accordingly. 10. The next ground is regarding disallowance of Rs. 4,55,422/- u/s 43B of the Act. The assessee company has raised this ground of appeal before the Tribunal vide additional ground of appeal . It is submitted that the learned CIT(A) has disposed of this ground in a cryptic manner without any discussions. The assessee company submitted that due to inadvertent omission, the assessee company did not raised this ground o....
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.... that as per the terms and conditions for allotment of land it is permissible to sell the plot of land subject to sharing of 50% of unearned income on sale of plot i.e. profit earned by the assessee company with the Collector . It was submitted that the Government of Maharashtra and the assessee company are co-owners of the plot sharing equally in the case of sale of plots. The amount is payable to Collector's office only. The A.O. in his assessment order for the assessment year 1998-99 stated that the assessee company had disallowed Rs. 45 lacs u/s 43B of the Act. The assessee company submitted that the above amount was disallowed since the same was not paid and it was for change of user from industrial purpose to commercial purpose. The point of disallowance was not payment , and not any share of taxes, rules or duties payable to the Collector's office. However in respect of the sale of these two plots, the assessee company is not contesting the amount payable but the Collector is not accepting this amount and raised demand of Rs. 119 crores in respect of sale of plots in the earlier years. Thus, the assessee company has prayed that the above disallowance should be deleted. The l....
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....- towards unearned income payable to the Collector which has been provided in the books of accounts , the Collector is not accepting this amount and raised demand of Rs. 119 crores in respect of sale of plots in the earlier years from the assessee company. Details of Collector charges of Rs. 4,55,422/- payable are placed in the paper book page 31,37,40,42 and additional working chart filed on the date of hearing on 16th March 2016. The learned Counsel for the assessee company submitted that this payment is not hit by provisions of section 43B of the Act. The assessee company relied upon the decision of Hon'ble Supreme Court in the case of CIT v. McDowell & Co. Ltd. [2009] 314 ITR 0167 (SC) and the decision of Hon'ble Kerala High Court in the case of CIT v. G. Soman [2011] 241 CTR 0082 (Ker.). The assessee company also relied upon the decisions of Hon'ble Supreme court in the case of CIT v. Excel Industries Limited (2013) 258 ITR 295(SC) and Bharat Earth Movers v. CIT (2000) 112 Taxman 61(SC) and submitted that the liability has accrued and is a real liability which should be allowed as deduction on matching principles . There is a liability payable by the assessee company keeping i....
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.... rather than arising out of any law in force which is the essential requirement to be made liable to be covered under the provision of Section 43B(a) of the Act which is reproduced below : "[Certain deductions to be only on actual payment6. 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- [(a) any sum payable by the assessee by way of tax6, duty, cess or fee, by whatever name called, under any law for the time being in force, or] ****** ****** shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him : [Provided that nothing contained in this section shall apply in relation to any sum [***] which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which th....