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TMI Blog2012 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the AO. 4. The facts of the case in brief are that the assessee derived income from salary, capital gains and house property. He filed his return of income on 17.01.2007 declaring an income of Rs. 60,86,876 which was processed u/s. 143(1) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" in short"] on 29.03.2008. Later on the case was selected for scrutiny. 5. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had declared Rs. 48,84,622 as income from short term capital gains. The AO observed that the assessee sold the land to several persons for a consideration of Rs. 1,36,74,410, the cost for the same was Rs. 6,89,788, the assessee debited an amount of Rs. 23,86,540 on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments were made to the land owner as advance for carrying out certain work before execution of actual sale deed. These payments are made through cheque to the land owners. When the actual Sale Deed is executed, the price of the land has increased and they were not willing to refund the advance taken by them. Because of the changes and development took place in the area where the land is located and also the general increase in the market rate of the land, the advance paid to these persons had to be treated as advance for land development and the respective land owners have not agreed for adjustment of advance towards cost of land, as the amount is paid towards owners also has done certain developmental work such as filling, leveling, rock c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added the same to the business income of the assessee. 8. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that the assessee purchased the land from Mr. Hariappa and agreed for certain amounts since the land was occupied by unauthorized persons. It was further submitted that the process of getting the land vacated from unauthorized persons took some time and during this period the market rate of the land had increased and the family members of Hariappa resisted for such low land rate. In support of the above contention, the assessee furnished the affidavits and letters given by the family members of Mr. Hariappa. It was stated that the assessee had to agree for payment of additional amount and shown in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not ask the remand report from the AO and also did not confront to the AO the new evidences produced by the assessee. Therefore, the ld. CIT(A) was not justified in deleting the disallowance made by the AO. 11. In her rival submissions, the ld. counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee had paid the amount to the family members of Shri Hariappa from whom the land was purchased and the said payment was made to ward off the dispute raised by the family members, therefore there was a close proximity of payment made to Shri Hariappa and his family members, who could have stalled the entire sale transactions. Therefore, the ld. CIT(A) was fully justified in de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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