TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 759
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....e in view of the prevailing situation of Covid-19 Pandemic. 3. In both these appeals of the assessee, common issues are involved, therefore, for the sake of convenience and brevity, a common order is being passed. 4. Firstly, we take ITA No. 1225/JP/2018. In this appeal, the assessee is aggrieved for disallowance of Rs. 5,17,339/- made by the A.O. while working out the capital gains. The assessee is also aggrieved for disallowance of brokerage expenses of Rs. 10.50 lacs. 5. Rival contentions have been heard and record perused. Facts in brief are that the assessee filed her return of income u/s 139 of the Act on 24-07-2014 declaring total income Rs. 3,46,0130/- including Long term capital gain on sale of agricultural land(s) of Rs. 3,32,....
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....ets sold i.e. agricultural land. During the course of assessment proceedings Assessing Officer asked the assessee to submit the details regarding funds borrowed for the purchase of agricultural land. The assessee vide letter dated 24-11-2016 has submitted that the lands were purchased several years back by borrowing funds from various parties and interest in respect to the cost of borrowed funds have been capitalized in the accounts. 8. We also found that the assessee is maintaining the ledger accounts of the plot/khasra wise different agricultural lands. The assessee before the ld. CIT(A) produced the copy(s) of ledger accounts for the period from 1-4-2008 to 31-3-2013 in which the interest has been capitalized to the cost of land. 9. Th....
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.... of long term capital gain at the time of filling of return of income. The assessee paid the brokerage/commission of Rs. 10,50,000/- to following brokers: Name of broker Amount Bank Name Cheque no. Kedar Prasad Gupta 1,75.000/- Indusind bank 249815 Shankar lal Sharma 1,75,000/- Indusind bank 249821 Arun Singh Dewal 3,50,000/- Indusind bank 910480 Utsav Sharma 3,50,000/- Indusind bank 846766 The assessee during the course of assessment proceedings filed the confirmation letters of brokers to whom brokerage paid having completed addresses and IT PA Nos. All the payments were made by accounts payee cheques only. The AO in the assessment proceedings asked the assessee to produce the brokers to whom brokerage has been paid a....
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....nce is also placed on the decision of Hon'ble Allahabad High Court in the case of Munnalal Murlidhar 79 ITR 540 wherein it was held that the failure on the part of the AO to call for and examine the evidence which is offered by the assessee materially prejudices the assessee and it is denial to the assessee of opportunity to produce evidence in support of its case. 12. As per our considered view when the assessee has duly filed confirmations from all the brokers to whom commission has been paid and they are also assessed to tax, adverse inference cannot be drawn against the assessee if the brokers to whom the brokerage amount has already been paid and the assessee even had no moral pressure. 13. In view of the above facts and circumst....
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....rchase of property and so interest paid thereon is required to be included in cost of acquisition of said property. The A.P High Court in case of Addl. CIT Vs. K.S. Gupta (1979) 119 ITR 372 has following judgement of Delhi High Court in CIT Vs. Mithilesh Kumari (1973) 92 ITR 9 held that interest paid on amount borrowed for purchase of open plot of land forms part of cost of acquisition.The High Court of Madras in case of CIT Vs. K. Raja Gopala Rao (2001) 252 ITR 459 and High Court of Karnataka in case of CIT Vs. Maithreys Pal (1985) 152 ITR 247 also held in same view. In view of these judicial pronouncements the assessee has correctly claimed the interest paid on borrowings for purchase of plot as cost of improvements. The action of the A.O....
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....uested that in the interest of justice notice u/s 131 may be issued to them so that their attendance can be enforced. It was also submitted to AO that assessee has no legal power to compel for appearance in person before the AO. Again, vide letter dated 21-12-2016 in response to show cause notice given by the AO as to why the commission paid may not be disallowed, the assessee again requested the AO to issue notices u/s 131 of the Act as all the brokers have already furnished their confirmations. The assessee has also filed copies of bank statements highlighting entries regarding cheques through which the brokerage has been paid to brokers. The assessee again submitted that it is beyond her power(s) to compel attendance of the called person....