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TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 752
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....t be considered u/s. 50. 2. Second Ground of Appeal relates to the Disallowance of expenses relating to the property incurred to make the same eligible for sale. Without prejudice to the first ground on the facts and in the circumstances of the case and in law, the learned CIT (Appeals) -4 while passing the Appellate Order did not allow the expenses incurred for renovation, clearance of liability against the property tax and legal expenses preparing the documents for sale. 3. Third Ground of appeal relates to the Disallowance of Administrative Expenses incurred against the income On the facts and in the circumstances of the case and in law, the learned CIT (A) - 4 while passing the Appellate Order did not consider the genuine operating expenses to be allowed against the income. The Appellant Company, therefore, prays the order of the learned assessing officer / CIT (Appeals) be amended to allow deductions / reliefs claimed above. The Appellant Company also craves leave to add to, alter and / or amend any of the foregoing grounds, if and when necessary." We have heard and considered the rival submissions and perused relevant material on record including documents place....
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....ty. Finally, the short-term capital gains were computed at Rs. 75.98 Lacs, being difference in sale value of Rs. 170 Lacs and Written Down Value of the premises for Rs. 94.01 Lacs as on 01/04/2013. 2.3 The assessee, in the alternative, contended that the expenses disallowed in working of STCG may be allowed as business loss which was also rejected in view of the fact that the assessee did not carry out any business activity during the year but earned only the rental income which was not the main business activity of the assessee. Finally, the income was determined at Rs. 90.53 Lacs which,inter-alia, comprised-off of Income from house property for Rs. 15.69 Lacs and Short-term capital gains for Rs. 75.98 Lacs. The business loss of Rs. 1.13 Lacs was allowed to be set-off against the same. 3. The Ld. CIT(A), upon further appeal, confirmed the stand of Ld. AO by observing as under: - 7.2 The appellant in its submission has referred and reproduced the provision of Section 50 and 50A and has accordingly contended that provision of Section 50 are applicable only in case depreciation was availed in respect of these assets under the Act. The assessee contended that they have disclosed t....
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....ect of the period prior to the Assessment Year 2013-14 as what status the property had etc. It is also seen from notes forming part of financial statement that the said asset has been reflected in the schedule of fixed asset as building under lease and 5% depreciation has been claimed and reflected therein for the year under 31st March 2013. Nothing has been mentioned for the period ending 31st March 2012 and the period ending 31st March 2011 in respect of the said property. Under these facts and circumstances the contention of the assessee that the provision of Section 50 cannot be applied in their case, is not found to be acceptable. Accordingly, the application of Section 50 by the AO and working out of the short term capital gain after reducing the WDV as on 01.04.2013 is found to be justifiableand is accordingly upheld.This ground of appeal is accordingly dismissed. 8. Ground No. 3: This ground relates to disallowance of expenses incurred on the property and cost of improvement thereof. 8.1. The assessee has incurred direct expenses of Rs. 33,41,029/- and has claimed the same as cost of improvement towards property sold by it, which was the issue under consideration in the....
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....brokerage of Rs. 3,40,000/- without any evidences. The aforesaid factual observations have been just mentioned here for the sake of clarity, however, they do not merit any consideration as the action of the AO in respect of the gains earned from the property sold have been held to be taxableu/s.50 of the Act. This ground of appeal is accordingly dismissed. 9. Ground No. 4.: The assessee by this ground contends that it is carrying out business activity of preparing the property to be suitable for disposal by making suitable modification etc. 9.1 The Assessing Officer in the assessment order has mentioned that assesseehas claimed Employee Benefit Expenses of Rs. 34,34,852/-, administrative expenses of Rs. 2,64,676/- and direct expenses relating to the sale of property at Rs. 33,41,029/-. All these expenses have been debited against the sale proceeds of Rs. 1.7 crore of a property sold by the assesses during the year under consideration. The AO in the assessment order has observed that there is no conclusive evidence submitted for thedirect expenses of Rs. 33,41,029/- and the Employee Benefit Expenses, AdminOverheads are also not fully allowable as the assessee during the year has....
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....siness carried out by the assessee and not for any other reason. There is no specific premise given u/s.37 of the Act, that when the payment is made to the directors, may not be even for the purposes of business and are not incurred wholly and exclusively for the purposes of business, still the same has to be allowed. The AO has allowed an amount of Rs. 1,13,680/- out of the other expenses claimed at Rs. 5,11,261/- for keeping the status afloat of the business entity of the appellant. Accordingly, no interference is considered, called for in the action of the AO, and therefore, the ground raised is accordingly dismissed. Aggrieved, the assessee is under appeal before us. 4. Upon due consideration, we find that the fact that the immovable property,which was sold by the assessee during the year under consideration, was part of block of asset Building remain uncontroverted before us. The assessee during assessment proceedings as well as appellate proceedings could not establish that the said property was not part of block of asset and depreciation against the same was never claimed in earlier years. As rightly noted by learned first appellate authority, the assessee could not brough....