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TMI Blog2010 (8) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... confusion in the mind of the AO because the assessee had also sold another property - under the deeming provision of section 2(47)(v), the date of possession is the material date for finding out the date of transfer as the transfer takes place when the possession is taken in a case covered u/s 53A of the Transfer of Property Act. As all the facts are not available on record, we think it fit to restore this matter to the file of the CIT(A)to ascertain the data of taking possession of the plot of land by the assessee and decide the matter of the date of acquisition accordingly. - ITA NO. 2322(DEL)/2010 - - - Dated:- 27-8-2010 - ORDER K.G. Bansal : Accountant Member These cross appeals in the case of husband and wife duo were argued in a consolidated manner by the ld. counsel for the assessee and the ld. DR. Therefore, we think it fit to pass a consolidated order. MRS. KIRAN BANSAL ITA No. 2322(Del)/2010 Appeal of the assessee 2. The assessee has taken up two grounds in the appeal to the effect that on the facts and in the circumstances of the case and in law, the ld CIT(A) erred in - (i) confirming the addition of Rs. 3.70 lakh as dividend u/s 2(22)(e) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of money as two sums of Rs. 2.00 crore and Rs. 50.00 lakh were paid from the bank account on 23.2.2006 and 11.3.2006 respectively. Therefore, it has been held that the amount is in the nature of loan or advance, which is caught within the mischief of section 2(22)(e). 5. Before us, the ld. counsel furnished the brief background facts that B.G. Creations Pvt. Ltd., controlled by the assessee and her husband, is engaged in the business of export of garments. The company advanced a sum of Rs. 3.70 lakh to the assessee for incurring expenditure on behalf of the company. This amount was later returned to the company. The amount paid is in the nature of "imprest amount" and not in the nature of a loan or an advance. In this connection, he referred to page No. 2 of the paper book, containing the schedule regarding "security deposits and other advances", which shows inter-alia a sum of Rs. 3.70 lakh advanced to the assessee. On the basis of the heading of the schedule, it is argued that it was in the nature of security deposits and other advances and not a loan or an advance. Further, a reference was made to page No. 3 of the paper book, being confirmation from B.G. Creations Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Another case relied upon by the assessee is the Kolkata High Court decision in Nandlal Kanodia v. CIT [1980] 122 ITR 405. In that case, the Hon'ble High Court had concluded that amount advanced by company in which the assessee was a shareholder to a third party, which third party advanced loan to the assessee was deemed dividend under section 2(22)(e), in sofar as it was found by the Tribunal to have been advanced by the company to the third party for the benefit of the assessee. As such, this case also cannot come to the rescue of the assessee 6. We have considered the facts of the case and submissions made before us. The facts of the case are that B.G. Creations Pvt. Ltd. paid a sum of Rs. 3.70 lakh to the assessee on 11.3.2006. The company is a company in which public are not substantially interested. The assessee is holding more than 20% voting power in the company. The company had accumulated profits far exceeding Rs. 3.70 lakh. It showed the aforesaid advance in its accounts under the head security deposits and other advances . It also issued a certificate that the payment is not in the nature of a loan or an advance but was made for the purpose of meeting expenses of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of, or for the benefit of, the assessee, a shareholder. Thus, the question here was in a totally different context when the payment was made not to the assessee, a shareholder but to his son. In absence of any evidence that the payment was made on behalf of or for the benefit of the assessee, the question was decided in his favour. The facts of this case are also distinguishable. In this case, the payment has been made to the assessee and not to her son or any other relative. On the other hand, the ld. CIT(A) relied on the decision of Hon'ble Calcutta High Court in the case of Nand Lal Kanodia v. CIT [1980] 122 ITR 405. Reliance was placed on discussion at page 415, where it is mentioned that the only question which remains to be considered is that whether the said company made the payments of the said sum of Rs. 75,000 and Rs. 4,80,000 to Indira Company for the benefit of the assessee. In sofar as Rs. 75,000 is concerned, it is found by the Tribunal, though not very clearly, that this amount was received by Indira Company from the said company and the same amount was given to the assessee by Indira Company. The Tribunal inferred from the said facts that this was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure for not constructing the house within stipulated period. In regard to expenditure on general maintenance, it was mentioned that this is not an expenditure towards any addition to the value of the asset. Therefore, the whole of the amount was excluded for the purpose of computing the capital gains. 7.2 Before us, the ld. counsel for the assessee referred to page 6 of the paper book, being the ledger account maintained by the assessee in respect of this property. This account shows three items of expenditure amounting to Rs. 5,000, Rs. 42,044 and Rs. 39,760 as payments to DLF. The second amount is stated to be maintenance charges up to 31.3.2004 and the third payment is stated to be for late construction fees. It was contended that these expenses represent cost of improvement to the property and, therefore, deductible from the full value of consideration received with suitable indexation. 7.3 In reply, the ld. DR relied on the order of the ld. CIT(A), in which the claim was denied on the grounds inter-alia that none of the payments was towards addition to or alteration of the asset. 7.4 We have considered the facts of the case and submissions made before us. The facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of fact whether the expenditure made to remove the encumbrance was genuine and the matter was decided in favour of the assessee, based upon the payment made much earlier in view of the impending civil suit. In the instant case, no payment has been made for removing the encumbrance on the property as there was no encumbrance. The payment was only for up-keep of the property which is in the nature of day-to-day cleaning etc. Therefore, the ratio of this case does not support the submission of the ld. counsel. On the other hand, the ld. CIT(A) relied on the observations made in the decision of Full Bench of Hon'ble Madras High Court in the case of Smt. S. Valliammai v. CIT [1981] 127 ITR 713. The question before the Hon'ble High Court was whether, in computing the capital gains on the sale of properties made by the assessee during the previous years relevant to assessment years 1966-67, 1967-68, 1969-70 and 1970-71, proportionate estate duty paid on the death of Shri Ramanathan Chettiar Smt. Umayal Achi in respect of property sold, should be deducted? The Hon'ble Court held that where the capital asset is a tangible asset, an addition can be only in the form of physical add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including possession was handed over to the assessee. The ld. CIT(Appeals) considered the facts of the case. It has been mentioned that Ansal Properties Industries Ltd. issued a confirmation on 28.12.1996 regarding transfer of plot of land to her name, which earlier stood in the name of Shri Surinder M. Ahuja. On the same date, the seller issued a request that the name may be changed accordingly. The credit of Rs. 5,43,300 standing in the name of the seller was also transferred to the account of the assessee. Therefore, the consideration was paid to Ansal Properties Industries Ltd. on that day. The possession also passed to the assessee to whom the company passed valid receipts. Thus, it has been held that the consideration had been paid and the name of the assessee had been taken on record by issuing valid receipts. Thus, the assessee acquired the property on 28.12.1996. 8.3 Before us, the ld. DR relied on the order of the AO while the ld. counsel relied on the order of the ld. CIT(Appeals). The ld. DR submitted that the possession of the property was not given to the assessee on 28.12.1996, but it was given on the date of registration. On the other hand, the ld. counsel sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kiran Bansal, in ITA No 2322(Del)/2010. Therefore, the order in that case is made applicable to this case also. ITA No. 2525(Del)/2010-Appeal of the revenue 10. Ground No. 1 is that the ld. CIT(Appeals) erred in holding the date of purchase of property as the date of acquiring the asset instead of date of registration for the purpose of determining the period of holding. The case of rival parties is that the facts of the case are identical with the facts of the case of Smt. Kiran Bansal in revenue's appeal bearing ITA No. 2526(Del)/2010 (supra). Therefore, that order is made applicable to this case also in respect of this ground. 11. Ground No. 2 is that the ld. CIT(Appeals) erred in directing the AO to allow set-off of business loss even though the assessee in his return of income claimed it to carry forward in violation of sections 71 and 72 of the Act. 11.1 From the order of the ld. CIT(Appeals), it is clear that the assessee had made the claim regarding setting-off by way of a letter and not by way of a revised return. The AO refused to entertain this claim in view of the decision of Hon ble Supreme Court in the case of Goetze India Ltd. v. CIT [2006] 284 ITR 323. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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