9911796707
TMI Blog2012 (9) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals arise out of the respective assessments completed under section 143(3) of the Income-tax Act, 1961. 2. In the appeal filed by the assessee for the assessment year 2005-06, two issues are raised. The first issue is in respect of the disallowance of Rs. 7,95,892/-. This sum related to the amount payable to Mr.Alphones Liguouri. The disallowance was made on the ground that the amount was not genuinely payable. The second issue is regarding the disallowance of Rs. 2,11,482/- made under section 40(a)(ia) of the Act. The case of the assessee is that TDS was made under section 194C and, therefore, there was no provocation to make any disallowance. 3. In the appeal filed by the assessee for the assessment year 2006-07, the only ground r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hdrawing the earlier claim of deduction made under section 80IB. In the course of assessment proceedings, the Assessing Officer found that even though the claim of deduction under section 80IB has been withdrawn by the assessee, it has made a new claim of deduction against the provision for payments to land owners. The assessee is basically engaged in the business of developing and promoting of residential flats. The Assessing Officer found that on the basis of the agreement entered into between the parties involved therein, the assessee was not bound to make any such payment to land owners and, therefore, the provisions made by the assessee in the revised returns were made only for the purpose of offsetting the impact of the withdrawal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned chartered accountant is that the land, on which flats were constructed, was not sold to the assessee company. There was only an agreement to build flats on the land. The land was finally transferred to the various occupants of flats as specified undivided right in the land, as usually done in flat construction. Therefore, he argued that the Assessing Officer was wrong in coming to the conclusion that the payments to the land owners were already settled at the time of purchase of land. He argued that as per the agreement, the consideration for the ultimate transfer of land was to be paid in progression to the sale proceeds of the flats constructed by the assessee. These arguments are very much relevant in appreciating the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Therefore, we set aside the orders of the lower authorities on the issue of provision made by the assessee for making payments to the land owners and the matter is remitted back to the file of the Assessing Officer for fresh consideration in the light of the true character of the transactions entered into between the concerned parties. 14. Likewise, the claim of the assessee towards the amount payable to Mr. Alphones Liguouri has not been properly considered by the lower authorities. Both the authorities have not examined whether such services were required in the business carried on by the assessee. Instead, they were rather led by technical aspects of evidence and documentation. In the case of disallowance under section 40(a)(ia) al ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
