TaxTMI 
TaxTMI 
2022 (10) TMI 1335
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.... assessee for assessment year 2010-11 are reproduced as under: 1(a) On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in holding, and the learned CIT(A) has erred in confirming, that land at village Dushmi was not agricultural land. (b) On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in holding, and the learned CIT(A) has erred in confirming, that the appellant had not regularly carried on agricultural activities on the said agricultural land at village Dushmi. (c) On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in holding, and the learned CIT(A) has erred in confirming, that the appellant had not developed a fruit orchard by regularly carrying on agricultural/horticultural cultivation activities on the land at village Dushmi. (d) On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in holding, and learned CIT(A) has erred in confirming, that the appellant had not acquired the agricultural land at village Dushmi as a personal asset for carrying on horti....
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....as per para 2(c) of the agreement the assessee was authorized to incur the expenses of not more than Rs. 12 lacs only. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in allowing assessee's claim u/s. 80IB(10) in respect of Aum Residency project totally ignoring the facts of the case and explanation to section 80IB(10)(a). 3. Briefly stated facts of the case are that the assessee, an individual, claimed to have carrying out business of development of real estate properties and trading in land. For the year under consideration, the assessee filed return of income on 22/09/2010 declaring total income of Rs.6,99,84,040/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-Tax Act, 1961 (in short of 'the Act') were issued and complied with. In the assessment completed under section 143(3) of the Act on 31/01/2013, the Assessing Officer (AO) made observation/addition/disallowance as under: (i) The books of accounts of the assessee were rejected on the ground that the assessee (a) failed to report some transactions of purchase and sale of the properties with M/s....
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....therefore, the amount of tax effect on said addition would be less than the limit of tax effect prescribed by the CBDT vide circular no. 19 of 2018, for not filing of the appeals. Therefore, according to him, the appeal of the Revenue need to be dismissed on the grounds of low tax effect. The learned DR also could not controvert the position of the low tax effect in the appeal of the Revenue. 4.2 We have heard the parties with regard to the appeal of the Revenue. We are of the opinion that tax effect in appeal of the Revenue is below the prescribed limit i.e. Rs. 50.00 lakhs, which has been prescribed for filing appeal before the ITAT vide CBDT Circular (supra). Accordingly, the appeal of the Revenue is dismissed being covered by the tax effect below the amount of tax prescribed by the CBDT for not filing appeal to the ITAT. 5. Regarding appeal of the assessee, before us, the assessee filed a paper book in seven volumes containing pages as per index of respective paper book. 6. The assessee vide letter dated 07/05/2018 filed additional grounds on the issue of sale of 'Dushami' Land as follows: "Additional Ground of appeal no. 1 "Without prejudice to the g....
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....t to be filed by the assessee as additional evidences listed by the assessee are reproduced as under: Sr. No. (1) Particulars (2) Page Nos. (3) Before which lower authority (4) 1. Copies of applications under Rights to Information Act (RTI) and copies of replies received and English Translation thereof 1 to 8A -- 2. Copy of letter dated 08.04.2017 filed before DCIT 29(3) for providing copy of summons issued on 05.11.2012 to Talathi, Village, Dushmi 9 -- 3. Copy of letter dated 31.03.1998 regarding permission for construction of water reservoir on the land and English translation thereof 10 to 11 -- 4. Copy of Certificate from Circle Officer, Hamrapur in Marathi & translation thereof of regarding distance of land 12 to 13 -- 5. Copy of Zoning of Village Dushmi Under Regional Development Plan 1999 to 2011 of Mumbai Metropolitan Regional Development Athority (MMRDA) 14 to 15 -- 6. Copy of resolution in Marathi of Gram Panchayat Dushmi passed in Gram Panchayat Meeting held on 29.03.1999 granting permission for Digging pits for Tree plantation & Translation thereof 16 to 17 -- 7. Copies of receipts....
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....land in question was purchased in 1995 and thereafter no agricultural activity was carried out. 11.1 In view of above observation, the Ld. AO issued show cause as why the exemption claimed on sale of the land might be denied. The assessee submitted that 'horticulture activity' was carried out on the said land and 200 mango trees were planted. The assessee further submitted that Government has allowed subsidy to the assessee for carrying out horticulture activities. The assessee also submitted that a dam was constructed/repaired on the land for watering the plants. For verification of the claim of the assessee, the Ld. Assessing Officer sent inspector of his office for visiting the land in question. The Inspector reported that there was no irrigation facility or any infrastructure facility nearby the land and the land had sprouting shrubs, wild grass and few trees. The Ld. AO further observed that land in question was entered in the books of accounts of the assessee under the head 'project account' and expenses incurred thereon on the land were also debited under the head 'project account'. Thus according to the Ld. AO the assessee had no intention of cultivating such land and it....
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....ure would be restricted only to cultivation of the land in the strict sense of the term meaning thereby 'tilling of land', 'sowing of the seeds', 'planting' and similar operations on the land which would require expenditure of human skill and labour upon the land . The Hon'ble Supreme Court in the case of Sarifabibi M Ibrahim (supra) has laid down following test for a land to be agriculture: 1. Whether the land was classified in the Revenue records as agricultural and whether it was subject to the payment of land revenue? 2. Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? 3. Whether such user of the land was for a long period or whether it was of a temporary character or by any of a stopgap arrangement? 4. Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land? 5. Whether, the permission under s. 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of th....
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....e of the Ld. AO for deciding afresh in accordance with law, along with the direction to the assessee to produce all those additional evidences before the Ld. Assessing Officer. The Ld. AO will be at liberty to carry out inquiries as deemed fit in the facts and circumstances of the case including obtaining maps of the land for relevant period from the 'Google' or from Indian space research Organisation (ISRO) for verifying the claim of horticulture activity of the assessee. It is needless to mention that adequate opportunity of being heard should be provided to the assessee. The objection of the assessee against treating the income from sale of 'Dushami land' as business income are not being adjudicated at this stage, as that issue is subsequent to the adjudication of whether the income on sale of said land is exempted or not, which we have already restored to the file of the Assessing Officer. 12. The ground Nos. 1 to 4 and additional ground Nos. 1 and 2 of the appeal of the assessee are accordingly allowed for statistical purposes. 13. The ground No. 5 of the appeal of the assessee relates to compensation of Rs.3 crore received by the assessee from M/s Godrej properties Ltd ....
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....y has been approved as independent plan on the plot of land nevertheless, it is no where mentioned in the IOD that the IOD was for amended plan passed in the year 1993. Thus, what is clear is that the project Aum Shanti is an independent project and has been approved by KDMC on 28.06.2006 and, therefore, prima facie the appellant is entitled to benefit of deduction u/s 80IB(10). In so far as the AO's observation that this is an extension of the earlier project is not discernible from the IOD produced by the appellant before me. However, the AO has not dealt with other conditions applicable for availing the benefit u/s 80IB(10). Therefore, the AO is directed to llow the benefit of deduction u/s 80IB (10) to the appellant in respect of project Aum Residency subject, however, to the appellant meets the other conditions specified in the said section like area of flat, commercial area, etc. In the result, this ground of appeal is allowed." 15. Before us the Ld. Counsel of the assessee referred to 'JV cancellation agreement' dated 08/04/2009, which is placed on page No. 32 to 37 of the paper book volume No. 2 (two)and submitted that said sum of Rs.3 crore was received against fore....
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....ss of source of income which being capital receipt, not taxable, whereas according to the Revenue said sum of Rs. 3 crores is actually a part of the conveyance of development rights of the property. 17.1 The cancellation deed is placed on page 32 to 37 of the paper book volume 2. For ready reference, the relevant clauses of the said cancellation deed, are reproduced as under: "1. The parties hereto do hereby aver and accept that they have cancelled the agreement which was executed between themselves on 5th May, 2004 for the development on joint venture basis of all those pieces and parcels of land or ground bearing survey no. 13 hissa no. 6 (part), survey no. 16 and survey no. 21(part) admeasuring 812.20 square meters, 830 square meters and 9799.02 square meters respectively situate at Village Barave, Taluka Kalyan, District Thane, hereinafter referred to as "The Said Land" 2. As and by way of compensation and consideration for the said cancellation and his having to opt out of the joint venture as aforesaid, Godrej have agreed to pay and have accordingly paid to Mr. Dalvi a sum of Rs. 3,00,00,000/- (Rupees Three Corers Only), the receipt whereof Mr. Dalvi does....
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.... the assessee has been paid as consultancy charges for liasioning work to Municipal Corporations. We also find that payment of more than Rs.50.50 lakhs has been reimbursed to the assessee for expenses incurred towards the project. Therefore, we do not find any reason for which the assessee could have been paid compensation. The only right which the assessee was having in the joint-venture was development right in the land, which was treated by the assessee as stock-in-trade in its books of accounts and therefore any amount, either it is conveyance or compensation, by what at ever name called, received by the assessee against the said land is trading or revenue receipt. 17.3 In case of Ind Sing Developers P Ltd (supra), the parties went ahead with development of the property and the dispute arose between the partes, for which suit was filed before the Court and then matter went for arbitration and conciliation. Under the conciliation, the parties came to settlement where the land owner agreed to forgo his right and interest as per development agreement. But in the case in hand before us even prior to commencement of development of property, the parties agreed for conveyance of la....
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....ly upheld. The ground No. 5 of the appeal is accordingly dismissed. 19. The ground No. 6 of the appeal of the assessee relates to additional income of Rs. 41,32,000/-, which according to the assessee has already been declared and offered to tax for assessment year 1995-96, but according to the ld. AO same is taxable in the assessment year under consideration. 20. The Ld. AO observed credit of Rs.1,51,05,000/-on account of the sale of GVD land to M/s GPL, however on verification of details from M/S GPL, the Assessing Officer found the amount received as of Rs.1,76,32,000/-. The assessing officer asked the assessee as why the balance amount might not be taxed. It was submitted by the assessee that out of the amount of Rs.1,76,32,000/-, amount of Rs.30,00,000/- and Rs.11,32,000/- were received by the assessee in financial year corresponding to assessment year 1996-97 as part of consideration for GVD Land at survey No. 6/1. 6/19, and 13/17 at Village Barve, Kalyan which was wrongly offered to tax in assessment year 1996-97. The assessee submitted that this land was finally conveyed to M/s GPL by agreement dated 22/03/2010. The Ld. Assessing Officer rejected the contention of the ....
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.... an income. Since the amount in question did not bear the character of income, then it is irrelevant as to whether the appellant was following accrual system of accounting or mixed system of account and, therefore, in the instant case the appellant was in his rights entitled to income only in the year under consideration and not in earlier year as has been claimed. Therefore, I am not inclined to accept the argument of the appellant that since the appellant was following the mixed system of accounting, the same should have been deducted from the current years income. Considering the fact of the case as well as laid down principles of accounting, I do not find any infirmity in the order of the AO and, hence, addition made by the AO is confirmed. Accordingly, this ground of appeal stands dismissed." 22. Before us, Ld. Counsel of the assessee submitted a copy of confirmation from M/s GPL related to payment of Rs. 30 lakh and Rs.11,32,000/-on 06/03/1995 and 1/2/1996 respectively. The Ld. Counsel also filed copy of profit and loss account to indicate that said sum was recorded by the assessee against land sales. In support of the claim that mixed system of accounting was followed by ....
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....ghania (supra) has had as under : "It is a fundamental rule of the law of taxation that, unless otherwise expressly provided, income cannot be taxed twice. Again, it is not open to the Income-tax Officer, if income has accrued to the assessee, and is liable to be included in the total income of a particular year, to ignore the accrual and thereafter to tax it as income of another year on the basis of receipt." 25.2 We are bound to follow the ratio in the case of the decision relied upon above, but factual verification as discussed above is needed. In view of above facts and circumstances, we feel it appropriate to restore this issue back to the file of the Assessing Officer for deciding afresh in accordance with law. 25.3 Now we take up appeal of the assessee for assessment year 2012-13. The Grounds raised by the assessee are reproduced as under: 1. On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in considering and the learned CIT(A)-40. Mumbai has erred in confirming 13.08.1993, as the date on which the plans of the housing project being building A of complex Aum Residency, as developed by the appellant at Kal....
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....upper floors through architects namely 'Acherkar and associates. Subsequently, on 05/02/2000, the assessee entered into a joint-venture agreement with M/s GPL for development of the land under the name of "Aum Residency". The architect Mr. DM Dalvi applied for approval of the project on 27/12/2005 and same was approved by the 'Kalyan and Dombivel Municipal Corporation' (KDMC) on 28/06/2006. According to the assessee, occupation certificate of the project was received before the prescribed period under section 80IB of the Act and therefore, profits from the project is eligible for deduction, though there was no profit in the year under consideration. According to Ld. Assessing Officer (for AY 2010-11), project was consisting of two parts. The first part relates to area of 3110m² of land and second part consist of the remaining land of total area of 7700m². According to the Assessing Officer date of commencement of construction of part one of the project is 13/08/1993, when the plan was approved. In view of the Assessing Officer, the part II of the project is merely extension of the project already in existence and therefore in view of explanation to section 80IB(10) of the....
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....t the assessee is following the project completion method for the entire project and till the year ending 31-3-2011 and has maintained a common account for both the wings A & B. However, during the current year relevant to the assessment year has prepared the separate accounts for both the wings. This act of the assessee proves that the entire project for which a single commencement certificate was issued is not complete before meeting the crucial date of completion i.e. 31-3-2012 and assessee has tried to claim deduction u/s 80 IB (10) without meeting the specific requirement of completion of the project. Hence on this point also assessee's claim for the deduction u/s 80 IB is not acceptable. In the backdrop of the discussions made in the forgoing paras and assessee's submission the claim of deductions by the assessee u/s 80IB(10) of Rs. 3,17,76,302 stands denied. Penalty proceeding u/s 271(1)(c) initiated for furnishing inaccurate particulars and concealment of income." 26. On further appeal, Ld. CIT(A) in the year under consideration has disallowed the claim of the assessee for deduction under section 80IB of the Act on two grounds. Firstly, the plan was appr....
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....he copy of the application made for approval along with supporting documents with respect to the plan approved an 28.6.2006, to ascertain whether it was an independent project or it was an extension of the sariter project approved in 1995 4.2. 4 On examination of the documents produce the following facts menses a) The IOD under consideration was issued on 28.6 2006 on the basis of application dated 27.12.2005. It is most important to note that the subject for the application Dated 27.12.2005 was amended plans of proposed residential development plot... and it had the following references i. Original IOD no. KDMC/TP/BP/KV/200-86 dt. 13.8.1993 ii. letter dt. 10.10.2002. of the applicant iii. letter no. DMDA/536 04-114 dt. 8.11.2004, of the applicant Further it is clears mentioned in the said letter that it was in respect of submission of an amended plan of the earlier plan of proposed residential development on the said plot vide letter dated 8.11.2004, for approval. Meanwhile, they have made certain amendments in the previously submitted plans and therefore this amended plan was submitted. ...................................
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....roject is first approved by the local authority. In view of the discussions made carlier and as evident from the facts of the case. the approval of the housing project under consideration was first granted on 138.1993, and subsequent 10D issued on 286.2006 was to approve the proposed amendments in the original housing project as approved on 13.8.1993. Hence the claim of the appellant that the subsequent approval dated 28.6.2006 was in respect of an independent housing project is not acceptable. in the given facts and circumstances of the case. 4.2.6 As per provisions of section SOIB10). the amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March. 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment vear from such housing project it- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1^st day of October. 1998 and completes such construction, (a) in a case where a housing project has been approved by the local authority before the 1^st day of April, 2004, on or ....
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.... Hiru Kalu Bhoir and others and Ram Shankar Mirkute and others Survey No/s. 55/3 55/3, 55/4, 55/5, 56/2 Architects Achrekar & Associates D M Dalvi & Associates Status of construction Never commenced any construction Commenced the construction after 28.06.2007 Completion of construction No question of completion as no construction started Building A - 31.03.2012 Building B - 5.11.2012 28. The learned Counsel submitted that permission dated 13/08/1993 granted by the Kalyan Municipal Corporation had lapsed at the end of the 12 months from the date of the sanction i.e. 12/08/1994, as per the provisions of section 48 of Maharashtra Regional and Town Planning Act, 1966 as no application for extension of the said permission from year to year was made to the local authority. The permission finally and permanently lapsed at the end of four years from 13/08/1993 i.e. 12/08/1997, as no application for extension of the said permission was ever filed nor any development of building beyond plinth level or a proper level of basement or stilled as the case may be, was ever carried out. 28.1 The Ld. counsel further submitted that the assessee had purchased ....
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....of ITO Vs AV Bhatt developers reported in 145 ITD 305(Pune) (iii) Tribunal Mumbai bench in the case of ITO Vs Kasturi construction reported in 54 SOT 384 (iv) Hon'ble Bombay High Court in the case of Vandana properties reported in 353 ITR 36. 28.3 In respect of the second reasoning given by the assessing officer for disallowance of deduction under section 80 IB, the Ld. Counsel the assessee submitted that from reading of explanation to section 80IB(10), it is evident that date of approval of the building plan shall be the date of the approval of the housing project. The explanation is worded keeping in view the provisions of the development control rules of the local authorities which provide for a sanction of a building plan and don't give sanction to any project plan for development of a housing project under the development rules. Therefore building 'A' of complex 'Aum Residency' is independent housing project, which is completed on or before 31/03/2012 and therefore it fulfils all the conditions of section 80IB(10) of the Act. A chart of fulfilling other conditions in respect of building filed by the assessee is reproduced as under: Status of compl....
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....horities and written submission of the assessee. The Assessing officer has rejected the claim of the assessee due to two reasons. Firstly, according to the assessing officer the approval dated 28/06/2006, is only an extension or amendment of earlier approval granted on 13/08/1993. Secondly, without prejudice, even if the approval dated 28/06/2006 is considered as approval of the housing project consisting building A and building B, therefore entire housing project was not completed on 31/03/2012 because occupation certificate in respect of building A was only received on 31/03/2012 and building B was not completed. 30.1 As far as first issue of approval for housing project granted more than once is concerned, the Ld. counsel has relied on the decision by the Hon'ble Bombay High Court in the case Vandana properties (supra). In said case the assessee had constructed building A, B, C and D on the plot of land and measuring 2.36 acres over a period of years. The concerned Municipal Corporation approved construction of those buildings in the year 1993 to 1996 and the assessee offered to tax the income earned from construction building A to D from time to time and no deduction under s....
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....d under Section 2 of the Act nor under Section 80IB (10) of the Act. Even under the Mumbai Municipal Corporation Act, 1988 as also under the Development Control Regulations for Greater Mumbai, 1991, the expression 'housing project' is not defined. Therefore, the expression 'housing project' in Section 80IB (10) would have to be construed as commonly understood. 19. As rightly contended by Mr. Inamdar, learned Senior Advocate appearing on behalf of the assessee and Mr. Mistri, learned Senior Advocate and Mr. Joshi, learned Advocate appearing on behalf of the intervenors, the expression 'housing project' in common parlance would mean constructing a building or group of buildings consisting of several residential units. In fact, the Explanation in Section 80IB (10) supports the contention of the assessee that the approval granted to a building plan constitutes approval granted to a housing project. Therefore, it is clear that construction of even one building with several residential units of the size not exceeding 1000 square feet ('E' building in the present case) would constitute a 'housing project' under Section 80IB (10) of the Act. 20. The quest....
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....g project. Therefore, in the facts of the present case, where, neither the assessee had sought approval of the building plan for construction of 'E' building as extension of the earlier housing project, nor the Municipal Corporation has granted approval for the housing project consisting of 'E' building as extension of the earlier housing project, it is not open to the income tax authorities to contend that approval to the housing project granted by the Municipal Corporation on 11th October 2002 constitutes extension of the housing project which was approved in the year 1993. 22. Reliance placed by the Revenue on the Explanation to Section 80IB (10)(a) which was introduced with effect from 1st April 2005 is also misplaced. What the said Explanation contemplates is that where the approval in respect of a housing project is granted more than once, then, that housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. For example, in respect of a housing project, the assessee may seek amendment of the building plan at several stages of the construction and the sa....
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....ribunal is reproduced as under: "9. We have considered the rival contentions as well as relevant material on record. It is evident from the record that there are three sanctioned plans approved by the local authority at different point of time in respect of the housing project. No doubt that in case when more than one approval have been granted by the local authority, the 1^st approval and sanction of building plan of the housing project shall be deemed to be the date of approval as per clause (i) of Explanation to section 80-IB (10). The assessing officer denied the deduction under section 80-IB(10) on the ground that the project was commenced prior to 1-4-2004 and the assessee has not completed the project up to 31-3.2008; therefore, the assessee failed to fulfil the conditions as per clause (a) of section 80-1B(10). The assessing officer took the commencement date when the Ist approval was granted by the local authorities on 12-9-2003 in response to the plan put up by Ms. Mohan Kheda Builders & Developers. 9.1 There is no doubt that there is more than one approval obtained from the local authorities at different point of time. However, it is to be seen whether ....
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....ruction of a housing project with building plan for building A and B having stilt plus 6 floors in the clubhouse having ground floor, which was approved on 28/06/2006 by the Municipal Corporation. 3. After acquisition of TDR of 3193 square metre, permission was again applied on 23/11/2007 for construction for using said TDR on plot of land, which was approved by the municipal corporation on 23/04/2008. 4. The joint-venture agreement between the assessee and M/s Godrej properties Ltd was cancelled, and the assessee himself took up the construction of the project at his own. 5. The housing project of the assessee was again amended by the as per application dated 01/04/2011 as the assessee had purchase and acquired survey No. 55/5 and thus the area of the amalgamated plot of land had increased to 7700m² and the carpet area sanction for construction was increased to 9640.14m². The building plan was sanctioned for two buildings having building A consisting of stilt plus 12 upper floors and building B having stilt plus 10 upper floors. The approval for the amended housing project was granted by the local authority on 14/09/2011 as amended construction....
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....om building 'B', which is another housing project. The contention of the Revenue is however that plan of construction submitted before the local authority vide application dated 17/12/2005 was in respect of the both building A and B, and therefore construction of building A and B together, constitute a single housing project for eligibility under section 80IB(10) and the commencement and completion has to be seen from the angle of completion of both the buildings A and B, and not separately for each building treating them as separate housing project. 32. The Ld. counsel of the assessee has relied on the decision of the Hon'ble Madras High Court in the case of Vishwas promoters Private Limited (supra). The relevant finding of the Hon'ble High Court is reproduced as under: "13. Section 80IA of the Act is a specific provision which deals with deduction in respect of profits and gains from industrial undertakings or enterprises engaged in the development of infrastructural facilities such as roads, bridges and other structure as regards the grant of deduction in respect of development and construction of a housing project. Section 80IB is a specific provision in respect of ....
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....ction 80IB(10) has to be construed as commonly understood. The Hon'ble High Court has held that building 'E' in said case was to be treated as a separate housing project. 33.1 The Ld. counsel has further referred to the decision of the Tribunal in the case of Siddhivinayak Venture Vs Addl CIT in ITA No. 1112 and 1527/Pune/2011, wherein the Tribunal in para 30 has held as under: "30. From the aforesaid discussion, it can be inferred that in order to understand the meaning of the expression 'housing project' for the purpose of section 80-IB(10) of the Act, in the absence of any definition section 80-IB(10) of the Act or even in the Local Development Control Rules for PCMC, it has to be construed as "commonly understood". The plea of the Revenue that expression 'housing project' should be understood to mean the project as approved by the 'local authority' is not justified because evidently the Development Control Rules of the 'local authority' i.e. PCMC does not define a 'housing project'. In-fact, from the discussion in the foregoing paragraphs it is evident that even a building or a group of buildings comprised in a larger project ....
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....t of various expenses at the rate of the 20% of those expenses. The finding of the Ld. Assessing Officer in this regard is reproduced as under: "6. On perusal of the P & L A/c, it is seen that the assessee has debited following expenses: Business Promotion Rs. 87,000/- Maintenance Rs. 67,495/- Site Expenses Rs. 3,40,882/- Travelling Expenses Rs. 28,907/- Advertising Expenses Rs. 1,17,914/- Office Expenses Rs. 1,33,562/- Sundry Expenses Rs. 10,300/- Rs. 13,86,060/- The assessee was asked to furnish the requisite details in respect of expenses claimed under the above heads, in response to which, the assessee has produced sample bills for verification. Some of the bills are cash memos without indicating the name of the assessee. The element of non-business purpose in this kind of expenditure cannot be avoided. Hence, these expenses cannot be considered as expenses incurred wholly and exclusively for the purpose of business. The assessee has failed to establish the nexus of these expenses with the business of the assessee and thus has failed to discharge its onus to prove its ciaim. The onus to prove any claim mad....
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....ction of the Ld. Assessing Officer of disallowing 20% expenses on ad-hoc of basis and confirmation of the same by the Ld. CIT(A) is rejected. The disallowance made by the assessing officer is accordingly deleted. The ground No. 3 of the assessee is accordingly allowed. 39.1 In ground No. 4, the assessee challenged disallowance of Rs.83,301/-being 20% out of motorcar expenses and motorcar depreciation. The relevant finding of the Ld. Assessing Officer is reproduced as under: "7. Motorcar Expenses & Depreciation on Motorcar:- The assessee has debited an amount of Rs. 1,12,096/- under the head 'motor car expenses' Rs. 19,116/- under the head 'petrol & vehicle and Rs. 2,85,294/- under the head 'depreciation on car'. The assessee was asked to furnish the details of expenditure claimed under these heads, in response to the same, it has been claimed by the assessee that these are exclusively used for the purpose of business. However, from the details Furnished by the assessee the exact use of has also not given any bifurcation of the expenses for business purpose and non-business purpose. Further, the assessee is not maintaining any log book for us....