2011 (12) TMI 619 - AT - Income Tax

Summary

Issues involved: Assessment of building maintenance charges, deduction u/s 24(a), income declaration from property transfer, reimbursement of expenditure.

Assessment of building maintenance charges: The Assessing Officer estimated income at 18% of gross contract due to lack of evidence for expenditure, resulting in an income of Rs. 1,20,763. CIT(A) upheld this addition along with other additions made by the AO.

Deduction u/s 24(a): AO restricted deduction claimed by assessee proportionate to period of property ownership, leading to a disallowance of Rs. 3,84,625. CIT(A) directed AO not to restrict the deduction under S.24, as Section 24 does not have a restrictive clause.

Income declaration from property transfer: Assessee transferred property for Rs. 1,07,00,000 with an oral understanding for development, but did not declare income for assessment year 2006-07. CIT(A) accepted income declared for other years and requested deletion of addition.

Reimbursement of expenditure: Dispute arose regarding Rs. 3 lakhs received from a buyer for property improvement. Assessee claimed the amount was for agreed property enhancements, but AO added it as unexplained cash. CIT(A) rejected AR's submissions and directed AO to estimate income at 10% of total receipts.

Final Decision: Tribunal confirmed CIT(A)'s order, upholding the estimation of income at 10% of total receipts due to lack of reliable book results and the assessee's substantial business volume. The appeal was allowed, and the order was pronounced on 27.12.2011.