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TMI Blog2015 (9) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... see, it is seen that 250 number of plastic moulded furniture items have been supplied but exact nature of item is not mentioned. Further the registered sale agreement though contains the clause that sale price of the said property include the cost and expenses for fitting and all other facilities provided in the said property, however, there is no specific mention that plastic moulded furniture was part of any fittings. Moreover, the buyer has specifically denied to receive any Air Conditioner or fittings. In view of the above findings, the action of the CIT(A) in restricting the disallowance to 50% of its improvement expenses does not seem proper. In view of the above, in the interest of natural justice,find it appropriate to send the matter back to the file of the Ld. CIT(A) to examine the issue alongwith expenses on repair, air conditioned plastic moulded further after giving due opportunity to the assessee. I hold and direct accordingly. - Decided in favour of assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... see received an amount of ₹ 52.50 lakhs against sale of their respective share in the property. In the return of income filed the assessees claimed short term capital gain on the sale of their respective share. While claiming the STCG, the assessees claimed improvement expenses of ₹ 46,37,256/- on the property, which was divided equally among all the four and worked out at ₹ 11,59,314/-. In the course of scrutiny proceedings the deatils of the improvement expenses was filed by the assessees as under: S.No. Name Amount Remarks 1. M/s Verma Associates 31,06,880 Paid for Repair Works 2. M/s Vinayak Trade and Agency 96,000 Paid for account purchase 3. M/s Nutech Engg. Corporation 14,34,376 Paid for Plastic Moulded Furniture 43,37,256 The Assessing Officer carried out enquires from persons in vicinty of the property through Inspector of his office and asked the assessee companies to produce the parties who had carried out the repair etc work. In view of non compliance by the assessees, the Asessing Officer carried out inquiries in respect of the improvement expenses from the vendor parties as well as from the buyer of the property through notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is in appeal before the Tribunal. 6. Ground Nos. 1, 4, & 5 of the assessees being the general in nature and need no adjudication. 7. Ground no. 2 & 3 of the assessees relates to confirming of 50% of expenses out of the improvement expenses of ₹ 11,59,314/- disallowed by the AO. 8. The Ld. AR of the assessee vehemently argued that all the parties are in existence and parties have confirmed receipt of payment and therefore 50% of the disallowance should not have been confirmed by the CIT(A). The assessees also submitted a paper book containing 1 to 164 pages. The Authorised Representative further argued that adhoc disallowances of expenses to the extent of 50% of expenses incurred by the assessee without pointing out any expenses which has not been incurred by the assessee was not justified and in support he relied on the decision of Coordinate Bench of Delhi in the case of Midland International Ltd. having citation 109 ITD 198 (DEL) (2007). He further placed reliance on decisions in the case of ACIT V. Allied Constructions 26 SOT 50 (DEL), CIT V. Dr Ratan Kumar Singh 35 Taxmann.Com 441(All))(2013), DCIT V. M/s Epcot Securities Pvt Ltd ITA No. 359/Mum/2009, Omprakash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave duly been served. And further it is also seen that the sale deed (page 11) confirms that the "sale price of the said property includes the cost and expenses for land and construction, development, fittings and all other facilities provided in the said property and building." 6.2 It is also a fact that Verma Associates to whom payment of ₹ 31,06,880 have been made appeared before the AO and they have confirmed having carried the repair work but because of theft of books of accounts they were unable to produce the same. In my view when the payments have been made by an account payee cheque, and the party receiving the same has confirmed that they have carried on the repair jobs, in that event, AO is not right to come to the conclusion that no work is carried and that too by simply and solely relying on the stand that no books of accounts were made available to him by Verma Associates. When the 3rd party who has done the job has confirmed that they carried the repair job and they have received the payment, and when the sale deed also confirms that the property sold was with all fittings development and other facilities in these circumstance AO is not fully righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter perusing the aforesaid finding of the Ld. CIT(A), I am of the view that the Assessing Officer disallowed the improvement expenses of ₹ 11,59,314/- to the property. The ld. Commissioner of Income Tax(A) reduced the disallowance to 50% of the expenses. The assessee raised the issue before the Ld. CIT(A) that inquiries were conducted by the Inspector of the Department at the back of the assessee and same was not confronted to the assessee. The proprietor of M/s Verma Associates though appeared before the AO and accepted the fact of carrying out work however, he failed to substantiate his oral statements with documentary evidence in the form of books of account. The proprietor of M/s Vinayaka Trade and Agency who supplied the Air Conditioners, on one hand admitted to have sold the Air Conditioners to the assessee but on the other hand stated that he did not install the same. Further, the assessee has not claimed any separate expenses on installation of Air conditioners. M/s Nutech Engineering Corporation did not comply with the summon issued by the AO. On perusal of the Bill of M/s M/s Nutech Engineering Corporation which is filed at page no. 104 of paper book of the assesee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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