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TMI Blog2015 (11) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... curred on the travel of the wife of the Director, was for the benefit of the company and promoting its good will. This factual finding of the First Appellate Authority could not be controverted by the Ld.Sr.D.R - Decided in favour of assessee. Allowability of depreciation - A.O. disallowed the depreciation on the ground that the vehicles were registered in the name of the employees of the company and hence the assessee company is not having ownership - CIT(A) allowed the claim - Held that:- The vehicles were purchased in the name of Shri Gautam Bhalla, who was the Director of the company and the real and beneficial ownership as well as the use of the vehicles was with and for the purpose of the company. No infirmity in the order of the First Appellate Authority, as the assessee is the owner of these vehicles and the disallowance is made merely on the ground that the vehicles are not registered in the name of the company, but in the name of the Directors. Such disallowance cannot be made - Decided in favour of assessee. Addition claimed as agricultural income - CIT(A) deleted the addition - Held that:-he First Appellate Authority gives the factual finding that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue for the A.Y. 2006-07 and 1998-99. The Cross Objection is filed by the assessee for the A.Y. 1998-99. 1.1. We first take up the appeal for the A.Y. 2006-07 in ITA 2160/Del/2010. The assessee is in the business of real estate. The grounds of appeal read as under. 1. The order of the Ld. CIT(Appeals) is not correct in law and facts. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting addition of ₹ 1,35,000/- on account of compensation for re-acquiring the rights in plots whereas such expenditure was incurred to earn substantial profits in future by way of repurchasing its own assets. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting addition of ₹ 1,35,000/- on account of compensation for re-acquiring the rights in plots whereas such repurchase is not the main business activity of the assessee and such repurchase are made by builders to multiply profits on its own projects. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting addition of ₹ 2,09,429/- on account of disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is against deletion of an addition of ₹ 1,35,000/- made by the Ld.CIT(A) on account of compensation for re-acquiring the rights of plots of land. The assessee received advance for the sale of plots. In certain cases the sale consideration is paid in instalments. Sometimes, for certain reasons the advance received by the assessee, is returned to the purchaser. When such advance is returned, certain additional amount is paid to the purchaser and this is called compensation. The question is whether, the amount paid as compensation, was for reacquiring the property already sold by the assessee, in which case it would become the closing stock of the assessee otherwise it would be an expense for the assessee. 5.1. The First Appellate Authority held that, the compensation paid by the assessee is not to reacquire any rights. He recorded a fact that, when the advance is received for sale of a plot, it was not treated as sale of plot, in the books of the assessee. In the absence of receipt of full sale consideration, the assessee has not treated the sale transaction as complete. Thus, when no asset is sold by the assessee, the question of reacquiring the same does not arise. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VTPL, which was earning agricultural income, merged with the assessee company during the A.Y. 2005-06. Statistics from the A.Y. 1992-93 to the A.Y. 2005-06 have been extracted by the Ld.CIT(A), to demonstrate that the assessee has been earning agricultural income for all the earlier A.Ys and that this has been accepted by the Revenue. These factual findings could not be controverted by the Ld.Sr.D.R. Hence we uphold the finding of the First Appellate Authority and dismiss ground nos. 6 and 7 of the Revenue. 10. In the result this appeal by the Revenue is allowed in part. 11. We now take up the appeal for the AY 1998-99 in ITA 1288/Del/2012 and C.O. no.212/Del/2012. The grounds of Revenue s appeal read as follows. 1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the penalty imposed by the A.O. u/s 271(1)(c) of the Act in respect of penalty charges of ₹ 20 lakhs paid by the assessee company. 2. The order of Ld.CIT(A) is perverse in law and on facts. 3. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 12. Facts in brief:- The facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 271 (1) (c) of the Income Tax Act, 1961 on 12.10.2009 against which the appellant filed its reply on 16.11.2009 and explained the circumstances for the claim of expenses made by the appellant in the return of income which were however not accepted by the assessing officer as well as appellate authorities and the additions were sustained. There after no notice was issued by the assessing officer and a penalty order was passed by levying a penalty u/s 271 (1) (c) of the Income Tax Act, 1961 of ₹ 7,49,0001- vide his order dated 30.03.2010. 13. The First Appellate Authority deleted the penalty with respect to the disallowance of ₹ 20 lakhs, which is a liability incurred towards, non performance within the stipulated time of a specific Clause in the Memorandum of Understanding. As far as the disallowance of depreciation on foreign car, the First Appellate Authority sustained the penalty. 14. After hearing rival contentions, we hold as follows. 15. The assessee has entered into an agreement dt. 30.9.1996 with M/s Vimco Ltd. As per this agreement, the assessee had to complete acquisition of agricultural land within certain time. As it could not do the same f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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