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2016 (2) TMI 500 - ITAT DELHIReference to Districts Valuation Officer (DVO) - addition on LTCG - Held that:- The ratio of the judgement CIT Vs Nelopher I. Singh (2008 (8) TMI 165 - DELHI HIGH COURT) is that when there is nothing on record to prove that assessee received a consideration from the sale of said property more than what is shown in the sale documents, the actual sale consideration recorded in the sale documents cannot be substituted by the value of the property arrived at by the DVO. Moreover, when Ld. CIT(A) has himself held in para 8 of the impugned order that neither the DVO nor the A.O. allowed any opportunity of being heard to the assessee before relying upon the report of DVO and thereby violated the rules of natural justice, he has committed error in deleting the addition on account of LTCG on land at ₹ 2,35,97,760/- and STCG on building at ₹ 60,16,039/-. So, we are of the considered view that the matter is required to be restored to Ld. CIT(A) to decide afresh after providing adequate opportunity of being heard to the parties Disallowance deduction on account of loss on sale of investment / asset - Held that:- Shri Vinay Gupta has failed to prove the source of investment of ₹ 5,00,000/-in the shares of M/s. Moriic India Ltd. As none has appeared on behalf of M/s. Vgyapan Bureau despite issuance of summon u/s 131 of the Act, to prove the contention of the assessee. he assessee’s contention to have sold 3,00,000 shares of its subsidiary company at loss to generate liquidity of ₹ 5,00,000/- is incomprehensible for the reason that after 15 years of investment he has sold shares at loss just to generate liquidity of ₹ 5,00,000/- particularly when he had already generated funds to the tune of ₹ 4,50,00,000/- on account of sale of property earlier than sale of shares and the assessee has even furnished no explanation when called upon to explain as to why the sale of shares of M/s. Moriic India Pvt. Ltd. be not treated as sham transaction. Therefore, the amount of ₹ 5,00,000/- credited in the books of accounts of Vinay Kumar Gupta on 29.10.2005, who has debited equal amount of payment to the assessee by reflecting the same in his books of accounts on 02.11.2005 and resultantly a sham transaction - Decided in favour of revenue Disallowance of claim of assessee qua bad debts - addition on the ground that the assessee has failed to prove that the return of debts had actually become bad and even list of parties whose debts were written off, has not been provided despite numerous opportunities deleted by CIT(A) - Held that:- In the instant case, assessee has written off bad debts to the tune of ₹ 90,97,536/- as irrecoverable in the accounts books for the Assessment Year 2005-06 and in these circumstances, assessee has no need to further prove that the debt has become bad and it is not necessary for the assessee to establish that the debt has actually become irrecoverable. The judgement of TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT ) is squarely applicable to the facts and circumstances of this case. Hence, we are of the considered view that there is no scope to interfere into the findings returned by Ld. CIT(A) in deleting the addition on account of disallowance of bad debts. - Decided against revenue Addition u/s 41(1) on account of cessation of liability - Held that:- The issue to be decided by the Tribunal is squarely covered by the judgement cited at Sugauli Sugar Works Ltd. (1999 (2) TMI 5 - SUPREME Court ) because merely by virtue of fact that a debt become time barred the right of the creditor will not come to an end nor the liability will cease and in these circumstances, Section 41 (1) of the Act is not attracted. So, when the liability qua the amount which is still standing in the balance sheet of the assessee, which fact has not been disputed by the A.O., the same cannot be said to have ceased. So, we are of the considered view that there is no scope to interfere in the findings returned by Ld. CIT(A). - Decided against revenue Addition of deduction of VRS expenses for the financial year 2000-01 u/s 35DDA - disallowance on the ground that the aforesaid section came into effect w.e.f. 01.04.2001 without any retrospective effect - Held that:- he addition has been made merely on the basis of wrong interpretation of the provisions contained u/s 35DDA of the Act. Any deduction claimed for the financial year 2000-01 u/s 35DDA is to be considered for assessment year 200 1-02, when undisputedly, section 35DDA become the statute w.e.f. 01.04.2001, the assessee is certainly entitled to get the benefit for the same. Moreover, A.O. himself had allowed VRS payment in the earlier year, and the deduction claimed in the year under consideration is only a consequential relief for the 5th year. So, even otherwise, Section 35DDA does not preclude the assessing authority to consider the VRS payment as revenue expenditure. - Decided against revenue Disallowance on account of late payment of PF contribution - Held that: It is the settled principle of law that the expenditure are allowable u/s 43B of the Act, even if deposited late, but before the date of filing of return of income. In the instant case, the assessee has deposited the amount late by 5 days but before the filing of return for the relevant period. So, we find no ground to interfere into the findings returned by Ld. CIT(A) on this issue deleting the addition - Decided against the Revenue Addition on account of communication expense and vehicle running and maintenance expenses - Held that:- A.O. has merely disallowed 1/4th of the total expenditure on account of communication expenditure on the basis of letter written by the assessee, but has failed to make out any element of personal nature by applying his mind in the said expenditure particularly in case of a company. When expenses have been made by a company, a juristic person, the question of disallowance of the amount on the ground that the same were of personal nature, does not arise. Addition on account of communication expenditure and vehicle running and maintenance expenses by considering the same of personal nature in case of assessee company, is not permissible as there is no element of personal nature in the communication expenses incurred by the assessee company - Decided against the Revenue Addition on account of staff welfare expenses and on account of conveyance expenses - Held that:- When the A.O. has accepted the books of accounts of the assessee and all such expenditure have been explained in the books of accounts as business expenditure, it is not permissible for the A.O. to proceed at his will by making the addition on the ground of whims and fancies. Moreover, the issue as to the admissibility of staff welfare expenses for the assessment years 1998-99 and 2001-02 has already been decided by the Coordinate Bench of ITAT for A.Y. 1988-89 and 2001-02, in favour of the assessee. So, we find no ground to interfere into the findings returned by Ld. CIT(A) on this issue also - Decided against the Revenue
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