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TMI Blog2014 (8) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the assessee had to take consultancy and advisory services in the matter of land acquisition from Mr. Surinder Pal and Mr. Sachin Shridhar. The necessary confirmations along with income-tax particulars were filed before the assessing officer in respect of Mr. Sachin Shridhar for payment of ₹ 9,65,000/-. Necessary confirmation along with affidavit, bank statement and acknowledgement of the ITR from Mr. Sachin Shridhar was also filed. Similarly, in respect of Mr. Surinder Pal, all evidences were filed. Therefore, there was no basis for making any disallowance. As regards the commission expenses, a sum of ₹ 14,41,070/- was paid to M/s Starlit Infrastructure Ltd. for the services rendered by them during FY 2007-08. Copy of the confirmation along with bills, affidavit and income-tax return for AY 2008-09 was also filed. The services of M/s Starlit Infrastructure Ltd. were taken for purchase and consolidation of land. Payment of commission was made directly on assessee’s instructions by M/s SKIL Himachal Infrastructure & Tourism Ltd. to M/s Starlit Infrastructure Ltd. The said party had charged service tax and had also paid necessary income-tax on the aid income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see s appeal is, whether, assessee is entitled to deduction u/s 54 in respect of second residential unit purchased by him or not. Brief facts apropos this issue are that as per the return, the assessee had shown long term capital gains on sale of property amounting to ₹ 16,13,247/- as exempt. 3.1. The assessee explained that he had sold one residential house property located at house no. 52, Sector 28, Faridabad for a sum of ₹ 42 lacs. He deposited a sum of ₹ 27 lacs in the capital gain scheme account with Punjab Sind Bank, Karol Bagh, New Delhi. The said sum was utilized for purchase of residential house property viz. Flat no. 3-D, Raj Griha Apartments, Salan for ₹ 11,00,000/-; and residential flat at Doon Apartment, village Gullarwala, Baddi for ₹ 12,50,000/-. Accordingly, it was claimed that the capital gains arising from the transfer of the old asset at Faridabad were exempt u/s 54. The assessing officer, after considering the assessee s reply and the provisions of section 54 concluded that the exemption is available only in respect of one residential house whereas assessee had invested the capital gains in purchase of two assets. He, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of CIT(A). 6. We have considered the submissions of both the parties and perused the record of the case. We find that this issue no more res integra in view of various decisions referred by the ITAT in the case of Meher R. Surti (supra). 6.1. Further, we find that amendment ahs been brought in section 54 to limit the exemption u/s 54 to one residential unit, which is applicable from A.Y. 2015-16. therefore, for the year under consideration the assessee was entitled for exemption u/s 54 in respect of more than one flat. In the result, assessee s appeal is allowed. ITA no. 2256/Del/2013 (Revenue s appeal) :- 7. Following grounds are raised: 1. The CIT(A) has erred in deleting the addition of ₹ 16,19,400/- made by AO on account of disallowance of cost of improvement. 2. The CIT(A) has erred in deleting the addition of ₹ 19,30,000/- made by AO on account of disallowance of consultancy charges. 3. The CIT(A) has erred in deleting the addition of ₹ 18,87,161/- made by AO on account of disallowance of commission expenses. 4. The CIT(A) has erred in admitting the additional evidences under Rule 46A which were not produced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills and vouchers for improvements claimed. The assessee, inter alia, explained that he had taken a loan of ₹ 13 lacs from LIC Housing Finance Ltd. and the said amount was utilized for carrying out construction of the residential house at Faridabad. Copy of loan offer letter from LIC Housing Finance Ltd. for the loan sanctioned was also filed. The assessee also produced bills of expenses in this regard. 10.1. The assessing officer did not accept the assessee s contention, inter alia, observing that assessee had failed to produce the copy of purchase deed as well as the original vouchers for improvement claimed. He, accordingly, disallowed the assessee s total claim of ₹ 16,73,110/- on this count. The assessing officer while computing long term capital gains only allowed ₹ 1,90,000/- being the purchase cost of the property on 18-6-1995 and disallowed the balance claim of assessee. 10.2. Before ld. CIT(A) the assessee submitted the documentary evidence in the form of valuation report by registered valuer certifying the cost of construction of the residential house property; occupancy certificate issued by HUDA; loan offer letter from LIC Housing Finance Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had paid consultancy to Mr. Surender Pal and Mr. Sachin Sridhar but the assessee neither provided any agreement between the parties and himself nor provided any document to show whether the payments were made in elation to earning the business income. He, accordingly, made the addition of ₹ 19,30,000/- on account of consultancy charges. As regards assessee s claim of commission expenses, the assessing officer did not accept the assessee s contention and pointed out that the assessee s claim was not borne out from the evidence produced by assessee. He pointed out that assessee had failed to explain how the commission expenses debited by him in his P L a/c were paid to the parties by M/s SKIL Himachal Infrastructure Tourism Ltd. The confirmations of those parties to whom M/s SKIL Himachal Infrastructure Tourism Ltd. had made payments did not mention the accounts of the assessee but rather confirmed the accounts of SKIL. He accordingly disallowed the sum of ₹ 16,87,161/- treating the same as bogus commission. 12.1. Before ld. CIT(A) the assessee clarified that the assessing officer had disallowed the expenses as under: S. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r M/s SKIL Himachal Infrastructure Tourism Ltd. (iii) On assessee s instruction the payment of commission was made by M/s SKIL Himachal Infrastructure Tourism Ltd. to various parties namely M/s Starlit Infrastructure Ltd., M/s Arun Kumar Associates (Architect), Sant Kumar Sharma, Ravinder Kumar Sharma (CA). The amount was deducted by M/s SKIL Himachal Infrastructure Tourism Ltd. out of consultancy income due to assessee. This contention of assessee had been verified through various documentary evidences filed by the parties confirming receipt of commission income from assessee, Sh. Laxman Singh Rawat, their ITR copies, bank statements, bill copies etc. (iv) M/s SKIL Himachal Infrastructure Tourism Ltd. has also duly confirmed the fact of making payment to the parties on behalf of assessee. It is common practice that a person instead of receiving payments due from one party asks to make payment on his behalf to another party. The commission payments made by assessee were duly confirmed by all parties. 13. We have considered the rival submissions and have perused the record of the case. The factual findings recorded by ld. CIT(A), on the basis of evidences filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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