TaxTMI 
TaxTMI 
TaxTMI 
2010 (12) TMI 1372
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....originally belonged to M/s. India Steel Rolling Mills Ltd. which was running a steel factory at the said premises. It was the submission that the said company had gone into liquidation and the assessee firm had acquired the land from the Official Liquidator of the said company. It was the submission that the said land was purchased by the assessee for a total consideration of 4,62,20,000/- and further stamp paper expenses of 6,75,000/- and deficit stamp paper of 30,22,600/-, registration fee of 4,62,880/- and miscellaneous expenses of 1,670/- had been incurred. The assessee had subsequently approached the C.M.D.A. for the purpose of converting the said land into sites for a township for which the C.M.D.A. charges of 2,03,800/- had been incurred. It was the submission that the assessee had subsequently on 18-01-2007 sold the land as a single block to M/s. Jesus Calls, a public charitable and religious trust for a sale consideration of 22,34,40,000/-. It was the submission that the assessee had filed its return of income for the assessment year 2007-08 wherein the assessee had claimed development expenses in regard to the said land to an extent of Rs. 6,97,78,544/-, commission ....
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....mission that the learned CIT(A) had also allowed the assessee's claim of the commission payment to the brokers to an extent of 44,68,800/- as also the interest on capital. It was the submission that the learned CIT(A) failed to appreciate that the Asst. Director, Mines & Geology Department had given a report that no outside earth had been used for filling the said land and consequently it could not be said that any development work had been done on the said land. It was the further submission that the learned CIT(A) had also taken into consideration an evidence in the form of reply to an RTI application made by the assessee to the Department of Mine & Geology. It was the submission that the order of the learned CIT(A) was liable to be reversed and that of the Assessing Officer restored. 4. In reply, the learned authorised representative submitted that in regard to the disallowances as confirmed by the learned CIT(A) to the extent of 1/3rd of the development expenses, 50% of the compound wall repairing expenses and confirmation of 35,87,098/- out of the commission paid to the brokers, the assessee is in appeal. It was the submission that the assessee had given the names and addre....
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....not been given an opportunity to examine the claims of the assessee, it was the submission that the Assessing Officer was present at the time of appellate hearing as is evident from the first page of the order of the learned CIT(A) as also para 2 of the order of the learned CIT(A). It was the further submission that the reply received by the assessee in regard to the RTI application filed before the Department of Mines & Geology also put to the Assessing Officer by the learned CIT(A) as mentioned in para 5.2 of his order and the Assessing Officer had also replied to the same. It was the further submission that even the details of the commission paid were made available and it was also confirmed by the statement of the purchasers of the land that the commission was paid. It was the further submission that the letter of the broker, Shri A. Maruthanayagam dated 26-12-2009 was before the Assessing Officer when the sworn statement from the purchasers had been recorded on 9-12-2009 as is evident from the order of the learned CIT(A) in para 10.1. It was the further submission that the learned CIT(A) had accepted the contentions of the assessee that the development had taken place. However....
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....ducted clearly shows that on an uneven or unleveled land such prayer meetings could not have been made. For filling up the gaps between the demolished building materials which are used for leveling the land, some portion of mud etc. would have to be used. This is also evident from the report of the Assistant Director, Mines & Geology which has admitted that the iron-based industry was in operation on the said land in the near past and the land also showed signs of leveling and that the land showed blue metal, soil and sand. In the earlier portion of this order we had mentioned that we are not deciding on the validity of the report. We may clarify to the extent that this report though given to the assessee does not fulfil the conditions of natural justice. The person who gave the report has to be put to the assessee for cross examination. The violation has taken place there. In such a situation the action of the assessee in filing the petition under the RTI Act for getting clarification as to what was the nature of the tests conducted, takes the form of cross examination. Under the RTI Act the reply given to the assessee clearly shows that the report is on the basis of visual observ....
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....he Assessing Officer does make a statement that the returns filed by the contractors were belated. In fact for the assessment year 2007-08 the last date for filing the return of income under the provisions of section 139 would be 31-03-2009. Excepting in one case of Shri S. Umapathy, all the other contractors have filed their returns before such date. In the case of the contractor, Shri Umapathy he has filed his return on 5-11-2009 and the TDS Certificate also shows the contract amount of nearly 78,88,723/-. A perusal of the assessment order in the case of the assessee shows that the assessee's case was taken up for scrutiny only by issue of notice u/s. 143(2/142(1) on 18-07-2008. The contractor, Smt. S. Vijaya has filed her return on 18-2-2008, Shri K. Sekar on 29-3-2008, Shri S. Venkatesan on 24-3-2008, Shri K. Ganesan on 29-3-2008 and Shri G. Chandrasekaran on 13.11.2007. Thus out of nine contractors five contractors have filed their returns much before the initiation of scrutiny proceedings in the case of the assessee. Admittedly, in the case of one of the contractors whose return has been filed subsequently, assessment has also been completed and all the contractors have admit....
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.... is there and this has been brought out in the order of the learned CIT(A) at page 7 para 5.6 which clearly shows that the compound wall has been repaired. Once this repairing is admitted, without any basis there cannot be partial disallowance. In the circumstances, the finding of the learned CIT(A) in restricting the allowance of expenditure in regard to the repairing of the compound wall at 50% is set aside and the Assessing Officer is directed to allow the claim of expenditure in regard to the repairing of the compound wall in full. 8. Coming to the issue of the expenditure in regard to the repairing of the old damaged well and the old damaged over-head tanks, pipe line, diesel motor and electrification also on similar lines in view of the acceptance of the development expenditure the disallowance as confirmed by the learned CIT(A) stands deleted and the Assessing Officer is directed to grant the assessee the complete allowance of the same. 9. In regard to the issue of commission paid to the brokers it is noticed that both the assessee as also the purchaser of the land have admitted that commission has been paid. TDS has also been deducted on the commission paid. The broke....