9911796707
TMI Blog2014 (2) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 68 of the Act – Advances against sale of shop and agricultural land – Held that:- Assessee contended that the documentary evidence submitted by him has not been properly verified by the AO - it is better to examine the parties concerned and also the cash flow statement furnished by Assessee, which was not done by AO – thus, the matter remitted back to the AO – Decided in favour of Assessee. Disallowance of expenditure - Leveling of land and construction of compound wall claimed as cost of improvements for the purpose of capital gains – Held that:- The amount has not been shown as expenditure in ways and means statement – thus, in the absence of explanation about source / evidence of having spent the amount of expenditure by way of documents, it cannot be allowed to that extent – Decided against Assessee. Addition on account of interest receipt – Held that:- The decision in G. Venkat Rao & Others Versus Asstt. Commissioner of Income-tax, Circle 8(1), Hyderabad [2012 (10) TMI 530 - ITAT HYDERABAD] followed - assessee submitted that there is income for the year under consideration and the profit & loss account does not debit any interest paid to the partners - Even the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence of any evidence of incurring the amount, the same cannot be considered as deduction while computing capital gain. To that extent, the order of the AO/ CIT(A) is confirmed. HoweverIt was noticed that AO made the addition to total income returned where as he has to adjust the same in capital gain computation, AO is directed to exclude the amount as a direct addition to the total income returned and to compute capital gain separately, as capital gain tax rate is lesser than the tax on other incomes. To that extent computation has to be modified by the AO. Ground No. 2 is rejected. 4. As regards Ground No. 3, the issue is of addition towards personal expenditure. In the absence of any evidence of drawal in wife account and of agricultural income, Ld CIT(A) confirmed the addition. 4.2 After considering the rival contentions we are not inclined to accept assessee contentions. No evidence was furnished against the withdrawal from any other source towards domestic expenditure .in view of smallness of the personal expenditure claimed, we consider it reasonable to restrict the disallowance to Rs. 30,000/- as against Rs. 40,000/- added by the AO. This ground is partly allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 of the Act. The CIT(A) confirmed the addition made by the AO. 12. We have considered the submissions and examined the issue. This issue is materially identical to that of the issue decided in AY 2005-06 vide Ground Nos. 2 3 at paras 7 8 (supra). Therefore, following the conclusions drawn therein, the issue is restored to the file of the AO with identical directions. This ground is allowed for statistical purposes. 13. Ground No. 3 is directed against the disallowance of expenditure of Rs. 6,00,000/- incurred for leveling of land and construction of compound wall claimed as cost of improvements for the purpose of capital gains. 14. Assessee had admitted long term capital gain of Rs. 4,39,090/-. From the computation of total income filed, the AO noticed that Assessee had claimed an amount of Rs. 1,00,000/- and Rs. 5,00,000/- towards cleaning, leveling fencing and mud filling respectively. Since Assessee had not filed any proof by way of bills, vouchers, etc. in support of the said expenditure incurred, the AO made the addition of Rs. 6,00,000/-. On appeal, the CIT(A) confirmed the said addition. 15. We have considered rival submissions and perused the record as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee as per Annexure No. A/DNR/06 of the seize material. It was submitted that any interest paid to partner which was not allowed as deduction, cannot be brought to tax in the hands of the partner. 20. The learned counsel further submitted that in the regular return of income filed, the partnership firm did not debit such interest paid to the partners. It was submitted that according to provisions of section 28(v), in case the amount of interest, salary, bonus or commission is not allowed as a deduction u/s 40(b) in the hands of the firm, such amount shall not be included in the hands of the partner. 21. The learned counsel placed on record the decision of coordinate bench in the case of G. Venkat Rao and G. Madhava Rao in ITA No. 1075 1076/Hyd/2011, order dated 10-07-2012 where on similar set facts coordinate bench decided as under: "8. With respect to the addition of Rs. 6,06,332/-, the assessee submitted a copy of the return of income for the assessment year 2008-09. The learned counsel for the assessee submitted that there is income for the year under consideration and the profit loss account does not debit any interest paid to the partners. Even the capital accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the firm NVM Seetharamanjaneya Constructions credited interest to the partners @ 24% and the AO while completing the assessment of the said firm allowed interest paid to partners at 12% per annum on the capital and disallowed the balance amount. Further, it was submitted that there is no clause in the partnership deed providing for payment of interest to the partners. No interest was credited to the capital account of the partners and in the final accounts drawn based on the books of account impounded, such amount was treated as withdrawal and was debited to the capital account. No payment of interest was debited to the profit and loss account of the firm and the AO also did not allow any such amount as deduction u/s 40(b) of the IT Act. 28. We have heard both the parties and perused the record. We have decided identical issue in AY 2007-08 (ITA No. 1414/H/11) vide paras 18 to 22, therefore, following the decision therein, we restore the issue to the file of the AO with identical directions. Thus, ground Nos. 2 3 are allowed for statistical purposes. 29. Ground No. 4 is regarding charging of interest u/s 234B and 234C of the Act, which is consequential in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
