2011 (2) TMI 1518

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....me tax (A)-XVI, Ahmedabad has erred in law and on facts in deleting the addition made of Rs. 90,000/- on account of Godown rent. 2. The Ld. Commissioner of Income tax (A)-XVI, Ahmedabad has erred in law and on facts in deleting the addition of Rs. 27,000/- made on account of weighbridge rent. 3. The Ld. Commissioner of Income tax (A)-XVI, Ahmedabad has erred in law and on facts in deleting the addition of Rs. 5,40,251/- made U/s. 40A(2)(b) of the Act." 3. Brief facts relating to controversy involved in ground nos. 1 and 2 are that in the assessment order, the Assessing Officer disallowed Rs. 90,000/- on account of godown rent and Rs. 27,000/- on account of weighbridge rent by invoking the provisions contained in section....

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....ook the view that there is an abnormal increase in the rent and now this has been paid to related person as mentioned in section 40A(2)(b). Therefore, he disallowed the same. He submitted that the area of the godown is the same. Only ownership has been changed. He submitted that due to change in ownership, the rent cannot be increased. Therefore, the provisions of section 40A(2)(b) are clearly attracted. Similarly, in respect of weighbridge rent also, the Assessing Officer observed that rent has been increased from Rs. 6,000/- to Rs. 16,000/-, due to change in ownership in the property. Therefore, disallowance was rightly made by invoking the provisions contained in section 40A(2)(b) of the I.T.Act, 1961. He submitted that before the Assess....

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.... the land, etc. In case, it was a different godown, the assessee ought to have stated the same clearly before the Assessing Officer. Since this was not done, the order of ld. Learned Commissioner of Income Tax(Appeals) in respect of both the disallowances is set aside and the matter is restored to the file of the Assessing Officer with the direction that the assessee should furnish old and new rent agreements in respect of godown as well as weighbridge land. The Assessing Officer will examine the same and ascertain the area of land, whether it is different, the prevailing rate of rent in the nearby land and re-adjudicate both the additions afresh, after bringing record the comparable cases and giving necessary opportunity of hearing to both....