2013 (6) TMI 741 - AT - Income Tax

Summary

Issues involved: Cross appeals by Revenue and assessee regarding assessment year 2008-09 under section 143(3) of the Income-tax Act, 1961.

Revenue's Appeal:
1. Cash Payments for Land Purchase: Revenue challenges allowance of cash payments of Rs. 3,93,00,000 for land purchase under Rule 6DD. Commissioner deleted this addition citing exclusion under Rule 6DD(g) and upheld by ITAT based on a similar decision for the previous year.

2. Disallowance of Land Development Expenses: Revenue contests deletion of Rs. 9,84,19,432 disallowance by CIT(A). ITAT upholds CIT(A)'s decision based on previous ruling for the assessment year 2007-08.

3. Non-Compliance with Rule 46A: Revenue alleges CIT(A) did not follow Rule 46A while disposing of the appeal. ITAT finds no merit in this argument as all details were provided to the Assessing Officer earlier.

Assessee's Appeal:
1. Disallowance under Section 40A(3): Assessee challenges the disallowance of Rs. 10,25,77,251 under section 40A(3) by the Assessing Officer. ITAT finds the CIT(A)'s confirmation of disallowance to be lacking in examination of expenditure components and Rule 6DD applicability. The issue is remitted back to the Assessing Officer for fresh examination.

2. Interest Levy under Sections 234B and 234C: Assessee disputes the levy of interest under these sections. ITAT deems this ground as rhetorical and rejects it.

In conclusion, the Revenue's appeal is dismissed, and the assessee's appeal is partly allowed. The judgment was pronounced on June 21, 2013, at Chennai.